Within 10 days of marketing the Buyer Protection Plan, Vancouver mortgage broker Mark Fidgett had six Realtors sign up with the program and become new referral partners for his business, Verico
Not a Penny Down Mortgages.
“Typically you walk into a Realtor’s office and everybody is saying, ‘I have the best rate, I have the best service. If you have two deals on your desk Mr. Realtor, can I have one?’” says Fidgett. “With this program, I’m walking in and saying, ‘I know you have two deals on your desk and may deal with another mortgage broker, but what if I put another two on your desk?’ This program is allowing the relationship to change.”
The Buyer Protection Plan (BPP) was soft launched in mid-October by Calgary mortgage broker Greg Williamson
to offer a differentiating product for Realtors, provided through mortgage agents.
BPP mitigates a homebuyer’s concern that real estate prices may fall after purchase. In this program, the seller agrees to reimburse the buyer up to five per cent of the purchase price if the median MLS sales price of similar local properties falls. For example, if a house is sold for $300,000, the seller places five per cent ($15,000) in escrow to protect the buyer. If prices fall by five per cent or more by the end of one year, the buyer receives the $15,000. If prices remain the same or increase, the $15,000 is returned to the seller. If prices fall less than five per cent, the funds are divided proportionately.
To participate in BPP, Williamson charges mortgage brokers a $180 monthly membership fee, which includes various sales coaching tools, plus $19.95 per listing. There is zero cost for the Realtor to sign up. From this exchange, agents have access to warm leads from member Realtors and home sellers. Williamson thought of the idea as a way to give brokers more value in their connections with Realtors.
“Brokers are typically chasing Realtors for business and the way they compete is to be a better servant than the next guy,” says Williamson. “The Buyer Protection Plan is part of a long journey to say to brokers that they can have a different approach to Realtors where they are in a leadership position.” Thirty mortgage agents were selected for the soft launch, and since then, 170 realtors have signed up. One broker recently taped a testimonial video for Williamson where she states she received seven leads from one realtor who signed up with BPP.
Fidgett acknowledges this tool is best served in a buyer’s market where Realtors have trouble selling homes quickly. “If you’re in a market where your phone is ringing off the hook, you have multiple offers and things are flying out the door, you don’t need this program,” says Fidgett. “But if you’re in a market where you’re not getting a lot of signings and phone calls, this lets the Realtor offer something different to help sell the home rather than just a price reduction.”
Mortgage Brokers Ottawa associate Lisa Theriault sees BPP as a slightly different kind of marketing tool. So far she hasn’t received any direct leads from BPP listings but it’s proven to be an effective way to expand her network. “I’ve had No. 1 real estate agents in this city, who I didn’t necessarily deal with before, call me, having the conversation about what is this plan, what am I offering that they don’t see anywhere else,” says Theriault. “It’s an added value because it helps set brokers apart from others. That’s been the biggest benefit of it for me.”
In Theriault’s experience, many people are still skeptical about whether BPP will be successful. But even though she hasn’t had any direct leads, Realtors who’ve signed up for the program through her have sent her leads of non-BPP clients anyway.
Williamson encourages any mortgage agent interested—and even skeptical—in the program to learn the whole picture by contacting the company through www.buyerprotectionplan.ca.
- Heather Li, CMP Staff Writer