and the provincial broker associations should bring this up to the regulatory bodies as the realtor referral points programs are rarely mentioned in realtor disclosure forms. Regulation around these programs is not as strong as it could be,” Michal A. said in the comments section of MortgageBrokerNews.ca. “Points are harder to track and quantify as opposed to a cash payment and can be cashed in anytime down the road for either money or an object.”
The Royal Bank
of Canada is now offering real estate agents $1,000 for every five first-time homebuyer referred to an RBC specialist. The program is set to run from May 1 until September 30 and is part of a comprehensive rewards program, which allows real estate agents can also collect points for referrals that can be redeemed for plane tickets, gift cards and merchandise, according to the Globe and Mail.
While some brokers view the move as an effective way for the bank to grow its mortgage business, others question the program’s effectiveness.
“I find it hilarious that RBC is paying the referring party only $200 per closed deal; RBC is the largest bank in the country and they just reported over $2 billion in profit last quarter,” Lior Hershkovitz of Mortgage Edge said. “A real estate professional deserves more than 200 bucks for a deal where RBC will generate substantial income from the interest portion of the loan right from the onset.”
And others question just how many realtors will take advantage of the opportunity.
“I don't know too many successful realtors that would want their client to know about the kick-back unless they were forwarding the kick-back, back to the client,” Paul Mangion of The Mortgage Centre said. “The realtors that will flock to this don't do any serious volume so it will only affect the mortgage agents that have crappy limited referrals anyways that get very little serious business.”
It’s RBC’s points program – and not the recently announced $1,000 cash incentive for realtors who refer clients for a mortgage – that one broker has an issue with.