At a fork in the road of real estate, Pietro Belmonte chose to travel the path that would keep his morals intact.
By Beverly Bidney
The real estate business can be rewarding, stimulating and challenging. It can also present situations in which an agent may be enticed to cross an ethical line, or not.
When Pietro Belmonte was working as an agent in New York City in 2000, he was faced with just such a scenario. The choice he made then has defined his professional life today.
Belmonte began his career in real estate in 1991 with The Corcoran Group Real Estate in New York City. His passion for real estate combined with his genuine people skills made the profession a natural choice. Starting his career in a down market, he worked weekends and 14-hour days to learn New York real estate. While most real estate agents concentrate on specific neighborhoods, Belmonte distinguished himself by focusing on luxury penthouses and, soon, became the recognized penthouse expert in the city.
One of Belmonte’s exclusive Manhattan loft listings had been on the market for six months and was about to expire. The loft, one of only 11 in an upscale building, was priced at $1,650,000. A broker saw the loft and announced he had a client who would pay the full price. The broker also indicated he wanted to structure the deal as a “net listing,” in which the sale price would be $1.6 million, but the broker would receive an additional $50,000 commission from the seller. Net listings are illegal in New York, a fact known by reputable real estate professionals in the state.
“When a listing is about to expire, you can be enticed to do things to get the deal done,” says Belmonte.
MANAGING THE SITUATION
Another real estate professional may have succumbed to the temptation of a significantly larger commission and risked losing his license. But Belmonte knew the broker was proposing an illegal transaction and refused to have anything else to do with him. Although net listings are illegal in New York, they are also commonplace.
“If it isn’t 100 percent above board, I don’t do the deal,” Belmonte says.
The unethical broker was a “kitchen broker,” someone who works from his own home and is not a member of any professional associations. Since there is no multiple listing service in New York City, brokerage firms often work together as co-brokers. Two major real estate firms ¬— the Corcoran Group, where Belmonte worked, and Prudential Douglas Elliman — control about 65 percent of all listings in New York City.
Belmonte refused to work with the agent again, and his firm followed suit. Ultimately, the agent was blacklisted from all Corcoran Group listings and co-listings. Essentially, the broker killed his own business by trying to enhance his earnings in an illegal manner.
However, net listings are legal in some states, including Florida. The practice is common here, but Belmonte still won’t have anything to do with a net listing. Throughout his career in Florida, Belmonte has convinced developers not to accept net listings because they distort the price of all units and can damage the developer’s reputation.
Admittedly, Belmonte is in the minority; most new developments in Florida accept net listings.
“The commission is what the commission is,” he explains. “Our fees are preset. It just isn’t right to renegotiate it in the middle of a deal.”
Within 48 hours of turning down the unethical New York broker, another broker came through with a legitimate and completely legal offer. Belmonte and the broker conducted an honest transaction, which closed successfully.
“In business, you don’t try to do something improper or unethical,” says Belmonte. “I believe in Karma, so what business you may lose by sticking to your principles, you gain 10-fold. It’s all about having a good product and being an ethical professional.”
Pietro Belmonte left New York in 2004 to open the first Douglas Elliman office in South Florida. Shortly thereafter, he served as director of sales for Ritz-Carlton Club and Residences in Miami, where he led his sales team in the sell-out of the project’s first phase that included 86 residences with a median price point of $2.5 million. In 2007, Belmonte moved back to Corcoran as director of sales for MONDRIAN South Beach, where he has sold 71 percent of the project in a softening real estate market.