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Affiliated Business: The Nemesis of Reason
Normally, I have no problem sharing my thoughts about affiliated business, yet for some reason found it difficult to do in an Active Rain post.  I have, in fact, relentlessly denounced affiliated business in the same manner as a preacher condemning sinful acts from the pulpit. The concept of affiliated business in real estate transactions was born of the Reagan Bush brain-trust during the late 1980's.  The federal mood and agenda at the time was one that encouraged bigness of business.  It was thought that "deep pockets" paired with technology could create an environment that reduced costs and enhanced services for consumers who were purchasing or refinancing a home. It all appears to be simple and reasonable enough.  An affiliated business arrangement exists when a real estate brokerage and a title company share the ownership of a title company.   By partnering in this way, real estate companies and agents are entitled to share in the profits of a captive operation.  Keep in mind, there are any number of possible variations to the theme including joint ventures with mortgage brokers.  I'm trying to keep this post as straightforward as possible by dealing with only the title industry's perspective. To be legal, and ... more

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