Study finds real estate agent-lender partnerships yield lackluster profitsMortgagePress.comReal estate agents,lenders
While many mortgage lenders have established strategic
partnerships with real estate brokerage firms in recent years, such
ventures aren't generating much mortgage origination business for
the sponsors. This is one of the principal findings of a new
Campbell Communications survey of real estate agents and brokers.
The study indicates that the mortgage capture rates of most real
estate firm-lender partnerships are surprisingly low.
The second annual nationwide survey of agents and brokers by
Campbell Communications, a Washington, D.C. marketing and research
firm, drew more than 1,700 responses when it was conducted in May.
The study was sponsored by Inside Mortgage Finance, a mortgage
industry newsletter.
"Despite the substantial access advantages enjoyed by partnered
lenders who place loan officers in real estate brokerage offices,
we estimate that the capture rates for most mortgage provider
partnerships is only between 19 and 29 percent," reported Tom
Popik, a principal at Geosegment Systems, who designed the survey.
"These capture rates are virtually the same, regardless of whether
the mortgage partner has special access, such as a loan officer
located in the real estate office and attendance at internal
company meetings."
The new report, "How Real Estate Agents View Relationships with
Mortgage Providers," reveals that real estate agents appear to be
losing influence--albeit slowly--with home purchasers on whom they
select as a mortgage lender. In fact, the statistics generated by
the survey indicate that real estate agents currently control or
influence the choice of mortgage provider in less than 40 percent
of home purchase transactions.
Some of the most noteworthy findings in the new study relate to
real estate firm/lender partnerships and how these ventures are
structured. For example, a very healthy 63 percent of responding
real estate agents said their firms partnered with one or more
mortgage providers. But at least 16 percent of these arrangements
were classified as informal.
Of the real estate firms involved with partnerships, 71 percent
reported the arrangement was exclusive with just one mortgage
provider. The balance involved partnerships with two or more
mortgage providers.
One of the most surprising findings of the new survey was that
relatively few real estate agents with mortgage partnerships--even
those with exclusive arrangements--recommend just one lender to
home purchasers. At firms with exclusive partnerships, 78 percent
of responding real estate agents said they recommended multiple
mortgage providers to homebuyers.
When the survey delved deeper, real estate agents indicated that
a mortgage partnership was not a primary consideration in
recommending a mortgage lender. Rather, things like "good service"
and "dependable with closing dates" were among the most important
factors cited by agents when it came to recommending a mortgage
provider. Notably, "partnership with my firm" received one of the
lowest ratings of the 24 factors covered in the survey.
For information on how to obtain the full report, contact
John Campbell at (202) 363-2069 or e-mail
[email protected].
