Mixed reviews for alternative to Realtor referrals

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Brokers turning to commission-free realties as a way around the traditional Realtor referral may want to rethink that strategy, said one mortgage professional pointing to his own “mediocre” results.

“We’re now advertising on one of those websites,” Mike Maguire, co-owner of Mortgage Wise Financial in London, Ont., told MortgageBrokerNews.ca. “But we’re simply not getting the hits to our websites that would justify the costs. It’s quite expense and the results have been mediocre also in terms of the quality of the leads themselves.”

The comments come as several real estate brokerages move to capitalize on new rules allowing them to offer flat-fee MLS listings to homeowners intent on a private sale.

This week, industry leader ComFree expanded its low-cost brokerage services in Ontario and Alberta. At the same time, it released the findings of a survey suggesting 58 per cent of Canadians would rather make a real estate purchase from someone who is not working on commission.

Brokers themselves are hearing much the same, now moving to advertise on the growing number of brokerage sites in order to connect with homebuyers operating independent of full-service real estate agents.

Many hope that the development of those sites will ultimately weaken their reliance on Realtor referrals, although those real estate agents have never been a primary lead generator for Mortgage Wise, said Maguire, conceding other brokers have found success advertising on commission-free sites.

Still, not all brokers are interested in going that route, even as the industry moves to embrace the new lead generation possibilities.

“I have not made it a priority to chase (them) as there are many mortgage brokers doing that in Northern Alberta already,” Len Lane, broker/owner of Verico Brokers For Life, told MortgageBrokerNews.ca “It’s interesting that 58 per cent of the people would rather not sell or buy through someone on commission because I think once people realize how much work it is to sell a home by themselves that they may have wished they had used the services of a real estate agent.”

It’s why Lane and others are hanging onto their existing Realtor partnerships.

  • GTA Broker on 2012-02-02 6:26:01 AM

    Lane hit the nail straight on.
    Before you jump into bed with low flat fee real estate brokerages,or FSBO companies, have a look a your referral sources. Are you getting business from conventional commission-based real estate agents & brokers? Could you afford to lose it all? A conventional real estate rep is not likely to refer business to a mortgage agent/broker/brokerage that is advertising doing business with "mere posting" style real estate firms, like it or not.
    If conventional real estate braokers & reps are gate-keepers to your business, it wouldn't be "career enhancing" to upset them.
    Since the 1960's, these FSBO & low fee real estate companies come out of the woodwork in hot markets. None have ever lasted more than a few years.
    As the real estate market softens real estate sales people who know their stuff will be able to show why they are worth their 4% or 5% commission.Real estate reps/brokers will negotiate fees down, if they know they are dealing with rational, reasonable sellers.

    Think of the type of leads you might get from these websites.If the sellers are so cheap that they will only pay $199.00 to have their house listed on MLS.ca, they are of the same mentality that wants to see how much you will buy down their rate with your finder's fee! Can the next guy get me an additional 5bps lower than you? So you are paying big advertising bucks to get a questionable number of clicks that don't convert, or when they do convert you your margins are squeezed to next to nothing.

    Its not really a business unless their is a potential for an acceptable recurring profit at the other end.

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