Mike Corn, president and CEO of CU Realty Services, believes it's vital for CUs to begin increasing their purchase-mortgage business, because the refi market may have just 18 months left before rates rise.
"If you have a real estate services, that is one way of definitely improving (non-interest income). Real estate has changed quite a bit over the last 20 years, so the perception that the agent drives the business isn't really as true as it used to be."
Corn said research shows consumers spend 12-18 months researching, buying or selling a home before they contact a Realtor, "so the credit union can create some stickiness by creating a real estate center members can go to and keep the brand in front of members at all times."
Corn noted that buying a home is one of the most emotional financial transactions a consumer makes," so with the CU being involved with real estate and being able to help the member from a real estate perspective, I believe it creates a stronger bond with them as opposed to a mortgage. The mortgage is just a means to get the home, but the home is the real key thing."
Corn urged CUs entering the real estate space to ensure members are aware of the service using advertising, banner ads on the CU's website, and social media outlets to inform members.
CUs with 40,000 to 200,000 members tend to do the best with realty services, said Corn. Smaller CUs don't generally see enough purchase-mortgage volume and larger CUs often just want to set up their own brokerage. "If you can give a Realtor six or more transactions per year, they're going to pay attention. So you have to have enough volume to do that," said Corn.
Corn urged small CUs to collaborate and work with Realtors and generate referrals.