PHOTO: U.S. real estate agents. FILE
As real estate sales — and commissions — rose during the pandemic, individual agents also got a helping hand from taxpayers.
While Covid was battering the U.S. economy, Gary Goldberg seems to have done OK.
During 2020, the pandemic’s first year, the Santa Barbara, California, real estate agent sold more than $27 million worth of luxury homes, slightly down from the $31 million he closed the year before, according to data from Zillow. In 2021, he sold $82 million worth of real estate.
He also applied for and received two loans totaling $95,832 via the federal government’s Covid relief Paycheck Protection Program, according to public records. In his applications, he listed one employee.
He asked for the first loan on April 15, 2020, and the second on Jan. 30, 2021. Federal records show he also asked for and received forgiveness for both loans by November 2021, meaning he had met certain criteria and did not have to pay them back.
In the United States, the average gross commission for real estate sales is 2.5 percent of the sale price, and the agent usually gets 85 percent of that, according to Real Trends Consulting, a firm that tracks home sales and commissions. According to that formula, Goldberg may have earned six figures in 2020 and seven figures in 2021.
Goldberg declined to comment for this article.
There’s no indication Goldberg did anything illegal and he’s certainly not alone. As real estate sales — and commissions — rose during the pandemic, individual agents also got a helping hand from taxpayers.
The federal government authorized more than 300,000 loans to real estate entities claiming just one employee, adding up to $3.9 billion in Paycheck Protection Program (PPP) loans backed by the U.S. Small Business Administration, according to data from the government’s Pandemic Response Accountability Committee (PRAC), which oversees pandemic relief spending.
On average these real estate businesses got $13,000, but 146 entities got more than $90,000 each, according to the PRAC data, all of which is public record.
PPP loans went to real estate agents in booming markets — $3.6 million to real estate entities in Beverly Hills, $4.3 million to entities in El Paso, Texas, and $14.9 million in 1,107 loans to real estate entities in Charlotte, North Carolina.
All the loans were made with the understanding that they would be forgiven if the recipient met certain criteria, like spending 60 percent of the loan on payroll, and the rest on eligible expenses. So far $3.1 billion of these real estate loans have been forgiven, and the government has significantly sped up its forgiveness in the past eight months. For the remaining $800 million in loans, borrowers have either not asked for forgiveness, they have been denied or the SBA and the lenders who issued the loans have not yet granted it.
The SBA says it has denied forgiveness for about 12,200 loans, and about 4,200 borrowers have appealed denials.
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