Today, you will see the “new ideas” have to do with companies making money by generating leads for others.
“While those in business, maybe good at their business, most cannot possibly be able to know their business and also know about advertising and marketing”, they think…
A good example is the travel companies. You have Expedia – Hotels.com – Travel.com – Priceline – etc… Then comes along Trivago… Trivago is where you go to “find the best” or “see all of” the deals. They are making money off of the travel websites, without being a “travel” website themselves.
In real estate, there are many referral companies, credit unions or otherwise. All cost a fee for membership.
Some go as far as to say they can provide you with “Top Realtors”, “The Best Agents”. “Top Rated Santa Clarita Realtor”, etc…
At some point they say they do the research which is usually a 10 line questionnaire filled out by the real estate agent.
Maybe the agent is referred to them, like in the case of a Credit Union referral service.
Some agents can join services such as these as well.
There is a cost and it’s two-fold.
First, the cost is what the agent pays to be a member of their referral service. That “cost” can equate to an upfront fee or money to be deducted from their transaction within each referral that closes.
Second, would be the cost of the “sacrifice” the agent has to make toward their clients.
First – the cost – this is typical of referral companies. They have to get paid. Maybe not up front, buy they are not in the referral business for free, that’s for sure!
The Second Item with a Credit Union Referral Service has to do with the “sacrifice”. They expect you to keep the client loyal to the Lender they referred you and the client to.
How it works: The Credit Union referral service goes into a Credit Union(many credit unions) and sells them with the following pitches: “We can help you!!” “We can increase your bottom line”, “We can increase your profit and your business”.
Then they talk about how the Credit Union needs to bring in “real estate agents”. You see, real estate agents refer their clients to a lender, in most cases.
“If you get the agents aboard with our program – they will refer their business back to you instead of another lender!”
They then add, “We will also have you on a Top Visited Website – pitching your Credit Union and Real Estate Loan Services” – “We will also pitch the advantage of discounts of rebates – who doesn’t want a deal when it comes to cost!”
Most Credit Unions get their fair share of re-finances from their current membership. In a lot of cases it’s the “new loans or originations” where they are lacking. The CU Referral service is pitching getting new home buyer business. I covered the “lacking” below in the bullet points.
This is because the Real Estate Agent knows the best lenders and how specific ones perform. They also know the lender who’d be the best “fit” for their client. Maybe their client’s financial profile is more straight forward – they’d have a lender for that. It could be their client’s credit profile is a bit more “muddied”, they may have a different lender for that.
In some cases this does not pose a problem. In other cases it does.
It all comes down, or should come down to, which lender, will best serve the needs and protect the real estate agent’s client. Not being loyal to the entity who is referring the real estate agent business!
If the Credit Union referral service refers one of their agents, who are paying for their services, to a person wanting to buy real estate, they expect them to “keep the client loyal” with the credit union they have referred them to!
They expect it. The punishment, if the agent see’s, as we did, that not all credit unions are in the best interest of the real estate buyer, is “official removal” from the Credit Union referral network.
I can only say I did my Job well. The Same as when I was a Los Angeles Police Officer. I did what I had to do and I know I made the right decision. When I had a public servant the CU referral service referred me to, a cop, on more than one occasion, getting shafted by a real estate lender, I could not sit idly by and let that happen. I bled with these men and women in my past “career!, and owe them the best in service and protection!
There are a few things that a good lender needs to be and some of the Credit Unions do not even come close:
- Available – The credit union should be available after hours and on weekends when the real estate client is being shown homes for sale to answer questions from the real estate buyer “their client”.
- Responsible – There are some credit unions which cannot do certain types of loan programs. Such as VA and FHA loans. They need to let the real estate buyer know, who was referred to them by a Credit Union Realty referral service, that they are going to be “farmed out”. Farmed out to another Lender who does those types of loans. (I’d want to know if I was being referred out to someone else – I hate surprises)
- Contactable – The real estate buyer has questions. The real estate buyer will need pre approval letters during odd hours and on weekends. Approval letters which match the amount being offered on the specific homes. Most Credit Unions are are a 9-5, Monday through Friday situation.
- Transparent – There is a lot of money to be made in real estate referrals from Credit Union referral services. The big banner they wave in front of everyone is “discount – rebate – advantage”. The sad thing is that we had seen, if some of those referred to us had keep their course, they would have been taken advantage of….
Credit Union Real Estate referral companies – To Trust them or Not to Trust them?
While I cannot say with 100% certainty that all Credit Union referral companies are bad and will ultimately result in the real estate client (buyer or seller) being taken advantage of financially or regarding service, some will.
It’s up to you to hire an independent agent, one who is not connected. The agent you hire should not feel as if they have an “obligation” to serve their “referral master”.
Or, if they are obtaining you via a referral, make sure they have the “intestinal fortitude” to sever their relationship with the Credit Union real estate referral service when they feel as if continuing is not in the best interest of the client.
Here is the Beautiful Thing
Some of us real estate agents have a Powerful Voice. I started in real estate and at the beginning I observed those in the lending professions, with the credit union referral services, who’d want to give us “help”.
I have a Daily real estate radio show – I have written over 10,000 real estate articles about the home buying and selling process – I have over 2000 real estate videos on our YouTube Channel and regarding the radio show – I have thousands of episodes speaking about the market, buying homes and selling them.
About Social Media – Thousands of Likes on our facebook pages – Thousands of Twitter Followers – Hundreds of thousands of views on Google Plus – Plus the same in amount of “connections”.
Maybe it was a new client. Maybe it was in the way of “lunch”. Unfortunately, both came at a price. They were expecting something in return. They expected us to refer them clients.
This would have been fine, not for payment, but only if they did a GREAT JOB and had the protection of the client at the forefront of their origination.
On referrals. I don’t expect monetary compensation. What I do expect is not having my name and reputation ruined by the actions of another whom I refer. Don’t we all expect that?