Although consumers still have an interest in—and considering the increased difficulty of obtaining financing, a need for—one-stop shopping for their settlement needs, real estate firms offering mortgages, title insurance and other ancillary services are still looking for the magic formula that will increase their capture rates.
During a session at the Real Estate Services Providers Council's annual meeting in Las Vegas, participants were asked for their best and brightest ideas for cross-marketing their menu of services to not just their buyer and seller clients but also their agents, many of whom still have a hard time buying into the one-stop-shop platform.
That flies in the face of a survey of recent and future homebuyers conducted this winter by Harris Interactive, which found that the appeal of using an affiliated service provider has grown over the last few years.
Conducted on behalf of the National Association of Realtors, the poll found that three out of four buyers believe one-stop shopping will save them money, make the purchasing process more manageable—even efficient and convenient—and prevent things from falling through the cracks.
Yet to hear RESPRO members tell it, their capture rates—the percentage of buyers and sellers who opt for the in-house or affiliate service—aren't what they should be, often because their agents prefer to recommend outside providers with whom they've done business with for years.
Of course, every company offering ancillary services would like to snare each and every side deal. But they don't. Heck, many say they don't even grab their fair share. And several said that without the extra profit that can be derived from other lines of business, the real estate market being what it is today, they'd probably have to go to work for someone else.
"Thank God we do" offer mortgages and insurance, confided an Ohio broker with multiple offices in the Toledo area. "It's allowed us to keep our doors open."
Hence, the need for ideas, anything at all, that will persuade agents to recommend the affiliated lender or title firm.
Other sessions at the two-day conference at the recently opened Cosmopolitan Hotel on the Las Vegas Strip covered how to reward and recognize affiliated business partners—without violating the Real Estate Settlement Procedures Act, of course—how to market affiliated services directly to buyers and sellers without alienating agents, and how to compensate and motivate managers in an effort to achieve the desired revenue goals.
But it was the session seeking innovative ideas that was the most free-wheeling, the most fun and possibly the most productive.
The room was divided into 14 tables, and persons at each table were given 15 minutes to discuss their particular schemes for boosting business. When the time clock expired, the participant who was considered to have the table's best idea was asked to stand and give a brief description of it.
Some strategies were novel; others, not so much. None were particularly earth-shattering. But then, such is the nature of trying to find a gem or two.
Here, gleaned from the two-hour session, is what some brokers are doing in the name of growing their affiliated businesses:
One company is rewarding its loan processors and closers for getting their documents to the closing table at least 48 hours prior to settlement, the theory being that there will be fewer delays. And if there's one thing real estate agents don't like, it's a delay. Actually, they don't like anything that can get in the way of a closing—and their commission.
Another company is asking office secretaries to remind agents that they should be recommending the in-house services their brokers offer. And yet another is requiring loan officers to set aside specific times every week to call at least 10 agents just to chat. "The message isn't as important as the contact," the Cleveland area broker explained.
A Colorado broker said she has hired an in-house "pre-underwriter" to go over loan packages before they are sent to the affiliated lender. That way, the broker said, if there is "anything hairy" with the deal, it will be discovered early enough so that the would-be borrower won't be able to hold the agent responsible for recommending the person which killed the loan.
In an effort to win his best agents business, someone else is asking his firm's top five producers to give the affiliated lender "just one deal" so the lender can prove it can do the job.
This approach "still honors the fact that many of our agents have long-standing relationships with other lenders," the broker said. "But we don't think it is asking too much."
