Special offer

The Realtor & the Mortgage Rep

By
Real Estate Agent with Max Broock Realtors

I get numerous calls every week from mortgage reps wanting to partner with me.  Some offer to pay for my catered broker open houses.  Others want to subsidize my advertising costs.  It seems that everyone that calls on me has something that they want to do for me to gain my referrals. 

Ok... first let me say that this post is not intended to bag on the mortgage reps. I think that these services are fantastic. I also believe that these "incentives" allow some reps to get their foot in the door with a Realtor that may not have given him/her a shot.  Bottom line; offering services and financial relief are a great ways for a mortgage rep to endure themselves to a Realtor.  That is of course, assuming that the mortgage rep can deliver when a deal is on the table. 

For five years I have been referring my business to a specific mortgage banker.  I've become good friends with her.  She also has become a good customer of mine.  In fact, I've sold 4 of her personal homes.  I'm very happy with this business relationship.  However, she never offers to help with my costs, which would be nice.  I don't care much because the referrals and her personal business are worth so much more to me.

The decision I've made works well for me and my business.  My preferred mortgage rep understands that when necessary, I do give out multiple mortgage rep names and numbers.  Sometimes I have to offer that to my buyers.  However, that doesn't happen very often.  I'd like to think that I'm a good referral source for her as well.  We have a reciprocal relationship. 

What I'd like to know is how many Realtors out there have exclusive relationships with mortgage reps? What are the expectations of both parties for this exclusive relationship?  Mortgage reps, what are your expectations of me as a Realtor; and are these relationships working well for you? 

Comments (14)

Rich Jacobson
Fathom Realty West Sound - Poulsbo, WA
Your Kitsap County WA Real Estate Broker

Sara,

Like you, I give out mulitiple recommendations. I promote 3 or 4 mortgage brokers on my website, More and more I am letting my Buyers decide who to use, as long as they are local. In some instances, based on their needs, I may direct them to someone specific. I don't necessarily expect my mortgage lenders to reciprocate (although it is nice when it happens!). It's more important for me that I can entrust my clients to someone I trust and that I can release them into their care without concern.

Sep 09, 2006 10:43 AM
Lisa Simpson
Mortgage Options - Summerville, SC
Sara, Coming from the mortgage broker side, I have several relationships with realtors that will only recommend me to the clients that they work with. They refer them to me because i have proven to them that I can get the job done. I have actually had realtors come to me asking me to partner with them.  I do believe that realtors and mortgage borkers should work together, If i can help with some offset of costs for marketing I will and have.
Sep 09, 2006 01:19 PM
Brian Brady
Matthews Capital Markets - Tampa, FL
858-699-4590

Sara:

This is going to sound awfully jaded but I will not "buy" business anymore.  I have spent years in relationships with Realtors and I always end up shelling out more than I bargained for.  I had a profitable ABA with Keller Williams Realty in Phoenix.  I had three loan officers in 3 different offices.  I paid a susbtantial amount of rent for those offices.  We catered sales meetings and always brought value to them.  In a period of three years, I had the "engine" producing 30-35 loan a month.  I had 8 total employees and was clearing about $150,000/year (without my personal production).  I was handing off personal deals to LOs and actind as a de facto recruiter for KW.  The owner ofthose three franshises sold each one off individually and each new owner cut side deals with my loan officers when the leases expired.

Her'es what I learned from that experience:  

1- The average full-time Realtor can refer you about 2-5 deals a year.  Most agents close 15-20 sides a year; that means there about 8-10 purchases.  3 of them are new builds (the bilder's lender subsidizes the business). 2-3 of them have their own financing.  That leaves me a shot at 2-5 deals a year.

2- I do things with Realtors that will help our business.  Want me to cook my World Wide Famous Fajitas at an open house?  I'm game because I meet lots of buyers.

3- Will I walk the street with you and talk to business owners about real estate?  Of course, i do that every day.

4- Will we both commit funds to an advertisong campaign for tough cerdt clients?  Of course.  I'll go dollar for dollarw with anyone.  Partners invest in each other but they both invest. 

My litmus test of whether I have a relationship or not with an agent is this.  Can I call your client a day after you enter his info into the MLS to prepare him for his next purchase?  If the anser is yes, I know we are in relationship and will entertain any joint marketing. 

I have found the best approach is my hard moeny and experience.  I always want to be your #2 guy.  I want the stuff that the banks can't or won't do.  The margins are better, the loyalty is there, and I can create something out of nothing.

That's the short answer.  I'm glad someone asked this. 

Sep 09, 2006 01:57 PM
Alexander Harb
Knights Investing - Mesquite, TX
Dallas, Texas Real Estate Investing

I have 10 loan officers I do business with...I cannot in Florida just give out one number and name......

It's against real estate law...let the client pick the loan officer to work with....

Sep 09, 2006 02:25 PM
Professor X
NONE - Ludington, MI
While its nice to have a solid relationship with one loan officer, or one real estate agent, in this business it is better to have good relationships with many, as far as I am concerned.  You never know who will have a good referal for you or know somebody that you will need an introduction to...This is a people kind of business, and I feel the more people you know, the better
Sep 09, 2006 02:38 PM
Maureen Francis
Coldwell Banker Weir Manuel - Bloomfield Hills, MI
Coldwell Banker Weir Manuel

I give out more than one name, just like I do with home inspectors and contractors.  I don't think that lenders are one-size fits all, and so I do refer different lenders, based upon whom I think will serve my client best.    

Sep 10, 2006 05:14 AM
Eddy Martinez
Nationwide Funding Group - Highland Park, CA
As a mortgage rep the only thing i ask from a realtor is to give me a shot with the customers who have bad credit and the spanish speaking clients. IF you do not like how i serve your client then you dont have to work with me. 
Sep 10, 2006 10:27 AM
Mitchell J Hall
Manhattan, NY
Lic Associate RE Broker - Manhattan & Brooklyn

Sara,

I have several that I recommend. My broker currently has an ABA with Wells Fargo. Prior to this relationship I always recommended a mortgage broker over a bank. Banks had specific products where as mortgage brokers could shop my buyers around to any lender. So far they've been really great, they have so many products and the mortgage broker is very experienced.

Prior to the ABA a mortgage broker in Manhattan, would see my new listing and would take the information off our website with pictures and price and print financial show sheets with a breakdown of several different loan scenarios for my listing price. They were delivered to my office by messenger. They came in very handy. He put both our pictures and contact info. I never asked for them.  

It's great that you get referrals and have sold houses to your broker. I'm sure if you asked her and she had the resources she would print up a financial analysis for your listings. It's good for her also.

Sep 10, 2006 02:17 PM
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

I feel very sorry for the REALTORS® who can't find one good mortgage broker to refer to and be able to depend on.

I'm ashamed of the mortgage brokers who can't demonstrate they're worthy of such trust.

It doesn't say much for the professionalism of either.

As for Florida bad law is normally the result of a quick fix for bad behavior.

 

Bill

William J Archambault Jr

The Real Estate Investment Institute

www.reii.org

Sep 10, 2006 05:44 PM
Jim Lee, REALTOR, CRS, ABR
RE/MAX Shoreline - Portsmouth, NH
Buying or Selling? Ann & Jim are the local experts

"I cannot in Florida just give out one number and name...... It's against real estate law.."

Hey Alexander,

I wish you would quote some source for this Florida law I would be very interested to see it and read about it.

I have one mortgage banker who has earned a place on my website under the "Mortgage Info" section.

She has earned that placement because she does an excellent job with my buyers, we close on time, and generally everyone walks away from the closing table happy.

I don't charge her to be on my website and she doesn't do anything for me except make my buyers happy; that's why she's on there, that's how she stays on there.

Sep 11, 2006 12:30 AM
Ken Stampe
iBrandPlan.com - Grow your e-Profile & Brand - Dallas, TX
iBrandPlan

When I started in the mortgage business in 1996 you had to rely very heavily on Realtor referrals. As a result, we tripped over each other to outspend to get your business. Then the real estate brokerage decided to cut into my piece of the pie. In my market, what had been a competitive but mutually beneficial relationship building process, changed. It's intereting that as mortgage professionals, we didn't go out and start real estate brokerages but the reverse most certainly happened.

In addition to this NAR started changing their national advertising to the public and put out the message that the consumer should be pre-approved BEFORE talking to a Realtor. After a while, the public agreed.

In the past couple of years I find that while non-scientificly measured, it seems that 7 of 10 home buyers have already talked to at least one lender before talking to the Realtor. It became more important for me to focus on reaching potential clients who had not yet talked to a Realtor.

Would you believe that over 50% of my home-buying clients have not talked to and have not hired a Realtor when I pre-approve them? I'm in the position of referring more clients to Realtors than I did in 1996.

Brian had it correct when he said that the right relationship for this market is a lender and Realtor who have a synergy as far as their value proposition and target market and they decide to co-market together. I advertise with a financial planner for reverse mortgage products and he for financial planning services. We don't do it because he expects clients directly from me or vice versa although our mutual respect is high and we probably would refer clients if it came up.

Ken Stampe  HomeLoanDFW.com

Sep 11, 2006 06:40 AM
Howard Jacobson
Jacobson Brothers - Troy, MI
We have many difernt mortgage reps that we have used in the past.  However, I have found that we usually go back toour number 1 gal because of the service she offers.
Sep 11, 2006 07:03 AM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

I have a relationship with a preferred lender.  I've used him exclusively for about 15 years.  His rates, service, low lender fees are such that no one can beat him in any area.  I feel completely confident recommending him because for me he's the best I know.  He gives superior service and if he says he can do a loan, the loan will get done.  If he says it can't be done, I've never found anyone else who could. 

He also does my personal financing.  I gave up $10,000 incentive from the builder of my present home to use my preferred lender.  That's how good he is. 

I do know other lenders.  If someone wants several lenders to "shop", I give two, three cards.  If someone wants my recommendation, I TAKE, not send them to my lender. 

This lender has saved several sales for me or my agents when the lender the buyer came with didn't produce or was charging what were clearly very high fees. 

The only time we have lender problems is when someone goes with a relative, friend or co-worker's recommendation.  Wouldn't touch that with a 10 foot pole. 

 

 

Sep 11, 2006 10:07 AM
Sara Young
Rock Financial - Bloomfield Hills, MI
Your mortgage rep appreciates your business.  I just know it!  wink wink, nudge nudge.
Sep 17, 2006 01:53 PM