While Covid was destroying the U.S. economic system, Gary Goldberg appears to have done well.
According to Zillow data, Santa Barbara's real estate agent, sold luxury homes worth more than $27million in 2020, which was the first year of the pandemic. This is slightly less than the $31 million he had closed the previous year. He sold $82 million of real estate in 2021.
According to public records, he also applied for and was granted two loans totaling $95,832 through the federal government's Covid Relief Paycheck Protection Program. He listed one employee in his applications.
The first loan was requested by him on April 15, 2020 and the second on January 30, 2021. Federal records indicate that he also requested forgiveness for both loans. This means that he met certain criteria and was not required to repay them.
The average gross commission for real property sales in the United States is 2.5 percent of the sales price. Agents usually get 85 percent, according to Real Trends Consulting. This firm tracks home sales and commissions. This formula suggests that Goldberg could have made six figures in 2020, and seven figures by 2021.
Goldberg declined to comment on this article.
There is no evidence that Goldberg committed any illegal acts, and he certainly is not the only one. Individual agents received assistance from the taxpayers as real estate sales and commissions rose during the pandemic.
According to data from the Pandemic Response Accounting Committee (PRAC), which monitors pandemic relief spending, the federal government approved more than 300,000.
These real estate companies averaged $13,000. However, 146 entities received more than $90,000. According to the PRAC data. All of this information is public.
PPP loans were given to realtors in booming markets - $3.6 million to Beverly Hills real estate agencies, $4.3 million El Paso entities, Texas and $14.9 Million in 1,107 loans to Charlotte real estate companies, North Carolina.
The loans were made under the condition that the recipient would meet certain criteria. For example, spending 60 percent on payroll and the remainder on eligible expenses. These real estate loans total $3.1 billion. The government has dramatically increased its forgiveness rate in the last eight months. Borrowers have yet to ask for forgiveness on the $800 million remaining loans. They have either declined, been denied, or both the SBA (and the lenders) have not granted it.
According to the SBA, it denied forgiveness of approximately 12,200 loans and nearly 4,200 borrowers appealed.
The Paycheck Protection Program, worth $789 billion, was created to save American jobs and help businesses recover from the pandemic. According to the PRAC, the SBA has forgiven 80 percent of all PPP Loans -- 9.9 Million -- and 84 per cent of the total amount.
According to the PRAC website, the percentage of forgiveness for real estate entities is nearly the same at 83 per cent of all loans and 84% of the dollar amount.
According to a senior SBA official, the numerous pieces of legislation that were voted upon by Republicans and Democrats and signed by President Donald Trump regarding loan forgiveness were "extremely liberal and generous".
Private lenders issued PPP loans that were backed by SBA. Borrowers can request forgiveness from their lender or the SBA by submitting forms and documentation.
Most cases, the lender will make a recommendation to SBA regarding forgiveness or denial. Sometimes, a borrower who is eligible may apply to SBA for forgiveness or denial. SBA then submits the application for approval to the lender.
According to a senior SBA official, in addition to denial of forgiveness for 12,200 loans the SBA also took aside 215,000 loans for manual review.
Han Nguyen, spokesperson for the SBA, stated that the Congress had previously prescribed in the CARES Act, that PPP loans would be forgiven if funds are used as needed.
"Since Day One, the Biden/Harris administration has strived to minimize inappropriate use of funds as well as ensure good stewardship taxpayer dollars. This will continue -- to the extent permitted by law."
Erin Stackley is a senior policy representative for commercial matters at the National Association of Realtors. She says realtors were in a state of uncertainty when the pandemic struck. Open houses were cancelled by sellers "because people didn't want people traipsing around their homes." Erin Stackley said that realtors are faced with multiple costs beyond payroll. These include office rent, fuel, and staff.
Stackley defended PPP loan forgiveness requests, saying that if borrowers received loans in good faith and followed program rules, "that is what Congress and the SBA intended to happen."
Despite the fact that tourism and restaurants suffered from the pandemics, residential real estate boomed.
Steve Murray, a partner in Real Trends consulting said that when the pandemic struck real estate brokers panicked due to the cancellation of open houses. He said, however, that it was evident from the nationwide open houses data that people were again looking at houses and that "something was about happening."
The number of housing sales increased 53 percent between April 2020 and Jan. 1, 2021. Housing prices are now 40% higher than in January 2020.
Murray stated, "I have been in the business since 1970 and I have never seen such a huge sales explosion."
The commissions rose as well. Murray states that before the pandemic, total residential commissions in 2019 was $76.2 billion. They climbed to $85.9billion in 2020 during the pandemic. The record-breaking $98.8 million was reached by 2021 commissions.
Pent-up demand and low interest rates are the main reasons for rising home prices. This has created an opportunity for real estate agents in hot markets to succeed.
NBC News reached out and secured PPP loans exceeding $90,000. These loans were either fully or partially forgiven by federal government.
Tina Guerrieri, a suburban Philadelphia house seller, has sold more than $25,000,000 worth of real property in 2020 according to Zillow. She also received a $100,000 PPP loan. According to public records, her loan was forgiven in 2021 and she doesn't have to repay it.
Guerrieri was asked by NBC News why she needed $100,000. She said she didn't want to reveal what the money was used for or how it was approved.
According to Zillow data, Jenna Jacques, a real estate agent, sold Scottsdale, Arizona property worth $25 million in 2020. The federal government also forgiven three other loans she received totaling $141,664, Multiple requests for comment were not answered by Jacques.
According to federal records, Shane Wierks, a New Jersey commercial realty agent, obtained two PPP loans totaling $151,833. He has also paid $103,000 to the federal government. According to public records, $48,918 was forgiven. Based on conversations with other agents, he said that $48,918 was forgiven.
According to NBC News, a real estate agent who received the money said that she believed asking for a loan from the government to be forgiven after a successful financial year was inappropriate.
Phyllis Patek was a Austin real estate agent who sold more than $10,000,000 worth of property in 2020. She received an $83,300 loan.
Records show that $36,000 of the loan was forgiven. However, Patek stated that she will pay it back as she was so successful in Austin's 2020 hot market.