Objections aside, paid referral fees are nothing but quid pro quo for business passed along to mortgage brokers, argue Realtors.
“If I am going to give a client to someone, I think I should get a referral fee,” said Stuart Barker, a Realtor with the Sutton Group in Montreal. “If I’m going to help someone build their business, I think a referral fee is appropriate.”
For Barker, there is no set bps on his client referrals to brokers.
The comments come on the heels of a MortgageBrokerNews.ca article last week outlining growth in the number of Realtor referrals to brokers instead of to the banks as a way of protecting the viability of deals at a time when banks are facing tighter lending guidelines.
In the article, a broker also suggested that broker-paid referrals are also being offered to help encourage Realtors in that direction.
Some MortgageBrokeNews.ca readers objected to the practice of paying Realtors for sending clients through the doors, although both in and outside Quebec, those referrals – usually paid to the real estate brokerage – are increasingly commonplace.
“Of course referrals work well, agreed Jill Prevost, another Montreal Realtor. “That’s the only way you make the business grow.”
Lenders such as National Bank, which has come under fire from some brokers for offering as much as 50 bps to Realtors, argue Realtors remain a viable and very attractive means of bringing business through the door, while increasing the likelihood of client retention.
Sean Chouman, president of Landmark Financial Group, told MortgageBrokerNews.ca that a tough economic climate has Realtors leaning more to brokers who can work harder to get the deal done.
“As the deals get fewer, Realtors just aren’t willing to take the chance,” said Chouman, “especially if many brokers are willing to offer a small referral or to sometimes split the commission.”