Realtors: Despite it all, brokers still key referral partners

Realtors: Despite it all, brokers still key referral partners

Realtors: Despite it all, brokers still key referral partners

Good news, brokers: You remain a primary referral partner for real estate agents even as the number of home sales slows across key Canadian markets. Bad news, brokers: More and more, the banks are determined to change that.

“I’m seeing lots more mailers and literature coming into the office from banks, offering incentives, points and Air Miles,” Mark Savel, a sales representative with Re/Max Realtron Realty in Toronto, told MortgageBrokerNews.ca. “I see agents who get swayed by those incentives, but in nine out of 10 cases, it’s still a mortgage broker who I’m referring a client to, and that’s because of the relationship that extends past closing and for the whole term of that mortgage.”

He’s not alone, with other high performing Realtors sticking to the same strategy in the face of increasingly aggressive targeting by the country’s Big Six as the number of new home purchases slows.

As MortgageBrokerNews.ca reported last month, National Bank’s CEO Louis Vachon told analysts that the financial institution is actively looking to grow the number of referrals coming directly from real estate agents, some representatives dangling cash finder’s fees of as much as 50 basis points.  

“I’m trying to still do more business with real estate agents because it’s less costly,” Vachon said as part of a conference call on Q2 financials. “So I’d rather get my origination from the cheapest source for mortgages. That’s why we’ve been expanding the number of people doing business with real estate agents outside Quebec.”

Other banks like TD and RBC, offering reward points rather than cash, have been just as active in courting Realtors, in some cases forming alliances with the corporate head offices of major realty companies.

“I send most of my clients to a mortgage agent, although my brokerage makes available a bank mortgage specialist, who I haven’t used,” Sarah Underhill, a high volume agent with Re/Max Hallmark told MortgageBrokerNews.ca. “Every time I load a new listing into the MLS system, a bank specialist will send me a financial sheet. They’re there and they’re really looking for business, and there are a lot of incentives, but I’ve been working with a mortgage agent that I have built up a relationship over four or five years now and I can trust that clients I refer to him will be taken care of. Another reason that I continue to go with him is his access to multiple lenders and competitive rates that I’m not getting from the banks.”

For the most part brokers are maintaining those connections without offering referral incentives, although most seek to “refer back” clients to the real estate agents they partner with, said Drew Donaldson, a senior mortgage agent with Verico Safebridge Mortgage Solutions in Toronto.

“It is about building and maintaining a close relationship with about five very active real estate agents and ensuring that they keep you top-of-mind,” he told MortgageBrokerNews.ca.  “It’s not about incentives.”

The comments echo those of another real estate professional frustrated by the high turnover of mortgage specialists at banks and incentive promises that failed to materialize.

“I solely work with a mortgage broker, and almost 95 per cent of the time my deals are funded through a mortgage broker,” Adam Brind, with RE/MAX Condos Plus, told MortgageBrokerNews.ca. “I’m trying to build a book of clients in the long-term and brokers are focused on the same thing. Quite frankly, my biggest issue with the banks is that there’s no relationship.”

Still, brokers may be losing on one front, said Savel: “They’re great, but they need a bigger and better voice out there to promote their work.”

8 Comments
  • Mike 2011-06-29 2:21:17 AM
    Is it not a CREA rule that if a Realtor benefits from the referral they must disclose that to the Purchaser? Would it not make sense then if a R.E. Brokerage actively solicited on behalf of a particular Bank that CREA would simply step in and ask to see all those "disclosures". Sorry I forgot, it's the Realtors that pay all those fees to CREA so why would they bite the hand that feeds them.
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  • Mortgage Broker from the Province of Quebec 2011-06-29 2:48:17 AM
    In the Prov. of Quebec, it has been already so long that all of the Banks pay .50% (of the mortgage amount) referal fee to Real Estate Agents for just handing out the name and telefone number of the client, that this became kind of standard practice amoung REA. Moreover I see a new generation of Mortgage Brokers that do not even see anything wrong with it and in addition, they even participate in that game of paying money to REA... Which I find sad... Therefore here 9 out of 10 deals go to the Bankers not Brokers... unless the last one are paying .50%...
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  • Another Broker 2011-06-29 2:51:14 AM
    Of course brokers are primary referral partners for real estate agents. If a realtor needs a doctored salary letter, NOA or bank statement the bank isn't going to provide them, the broker is. How many times have I sat down with an agent through the years and been asked to falsify information to make a deal work or been told that "this is how my other broker used to do it until they moved away". It's usually the big producers that ask for this I have found. The average realtor doesn't seem to have the same greed level and lack of ethics that the high producers do to make that extra deal and that extra buck. I think the best thing that could happen to us is what happened in the U.S. and take most of the realtors and mortgage agents out of the equation. This might clean up the business.
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