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14 Comments on The Realtor & the Mortgage Rep
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.
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.
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....
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.
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.
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
"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.
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
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.