Bad Apples in a Good Bunch

Last September’s spectacular collapse of Lehman Brothers will no doubt spawn a thousand treatises on how one of the oldest and most venerable investment banks on Wall Street—founded in 1850—was pushed so thoroughly and completely over the brink that it perished instantly.  In fact, at least one is already in print.

One of the company’s insiders, Lawrence G. McDonald—a vice president of trading during the firm’s run-up to demise—has finished a book that explores the blinding greed, hubris and downright stupidity that essentially caused the company to completely implode financially.

In an interview promoting the book—entitled A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers—McDonald said that one simple phrase in the book basically underscores the sudden and spectacular downfall of Lehman Brothers:  “24,992 people striving hard, making money, and about eight guys losing it.”  In other words, a handful of bad apples spoiled the whole bunch.

McDonald’s assessment that thousands of honest, hard-working professionals suddenly found themselves out on the street thanks to a handful of reckless, overcompensated rogues struck something of a familiar note.  We heard this characterization of Lehman’s downfall at about the same time as a few of our own “bad apples” were being skewered in a series of front-page articles in the Sarasota Herald-Tribune that recounted similar acts of greed, hubris and stupidity involving local property flips that were all the rage during the real estate boom.

We’re not here to argue the case for or against flipping properties; since there is nothing inherently illegal in a flip when it is done ethically, within the law and with complete transparency. In fact, Freddie Mac calls property flipping a legitimate business transaction; noting there are many in the real estate market that make an honest living flipping properties.  Flipping only becomes an illegal activity when a home is purchased and resold within a short time frame at an artificially inflated value typically based on a fraudulent appraisal.

Instead we’re here to decry those who have laid the damage that fraudulent flipping has caused our real estate market squarely at the feet of the entire real estate community. Once again it looks like a few bad apples have spoiled it for the whole bunch.  It isn’t enough that many ethical, hard working Realtors have gone months, perhaps years, without much of an income in this moribund market.  Now they’re being blamed for causing it.

As much as we are loathe to admit it, there are those connected with the local real estate profession—including Realtors, mortgage brokers, attorneys and others—who illegally gamed the system and should be prosecuted to the fullest extent.  Unfortunately in our imperfect world there is not a single profession that can lay claim to having no scoundrels.  Yet we don’t chastise the entire medical or teaching professions for the unethical practices of a few rogue doctors, nurses, teachers or administrators; any more than we blame every professional athlete for the illegal habits of a few of their teammates who can’t seem to make it through a season un-juiced.  To indict entire professions based on the bad behavior of a handful is unfair, gives the scofflaws more credit than they deserve; and cynically suggests that ours is a society largely populated by dedicated white-collar career criminals.

The reality, in fact, is just the opposite.  There are more than 6,700 real estate agents working full- or part-time within the Sarasota, Manatee, Venice, Englewood and Punta Gorda-Port Charlotte Boards of Realtors; along with countless others who toil in related enterprises such as lending, title services and real estate law.  Just as in every federal or state regulated profession, rigid ethical standards exist in the real estate profession, are rigorously applied and enforced every day, taught to each potential new licensee and subject to mandatory refresher training.  For every bad apple who still manages to get his or her name splashed across the front page for criminal or ethical misconduct there are hundreds of decent, hard-working professionals who earn their livings the old fashioned way—steeped in honesty and integrity.

Real estate agents are more than the familiar faces you see in church, the supermarket aisle or picking up their kids at school.  When they aren’t helping a client buy or sell a home, chances are very good you’ll find them devoting countless hours giving back to the community.  Ask any executive director of any not-for-profit or cultural organization in town and you’ll hear them praise the many Realtors who populate their volunteer forces and leadership teams. Agents affiliated with Michael Saunders & Company alone quietly distinguish themselves daily in service to such noteworthy organizations as All Faiths Food Bank, All-Star Children’s Foundation, Boys & Girls Clubs of Sarasota and Manatee Counties, Brothers & Sisters Doing The Right Thing, Child Protection Center, The Community Foundation of Sarasota County, The Downtown Partnership, Girls Inc., Goodwill Industries, Habitat for Humanity, Marie Selby Botanical Gardens, Meals on Wheels, Sarasota Museum of Art, Second Chance Last Opportunity, Senior Friendship Center and The Wellness Community, just to name a few of many.  Far from letting a few bad apples spoil their bunch, they’re the ones that put the shine on our business.

  • User Gravatar Laura
    August 13th, 2009

    Very well said. Thank you!

  • User Gravatar Mary Jo Kjeldsen
    August 31st, 2009

    Wonderful article and so true.

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