Homebuyers Wanting Affiliated Businesses

My first eight years working in the real estate & mortgage industry were at a one stop shop real estate franchise that also had an affiliated mortgage brokerage and title company. I didn’t realize it then, but this model of serving homebuyers benefited the realtors, loan officers, title agent and clients they were serving. It made it easy for communication to be consistent and buyers would most times go with the option that took the most work off of their plate. The one stop shopping real estate services is said to be the model of the future.

For the past 15 years, The National Association of Realtors has been keeping a pulse on homebuyer’s preferences, experiences and habits, when it comes to the professionals & companies they work with when purchasing a home and any piece of real estate.

What they found is that there is a greater willingness, even preference from homebuyers to work with affiliated companies, compared to five years ago.

“The OSS system continues to be the preferred method among buyers – 44% would prefer service providers to be affiliated with their real estate firm (on par with 42% in 2015), however, there continues to be another third (35%) that report no preference indicating an opportunity to demonstrate the benefits of OSS to this group.”

A recent survey by the National Association of Realtors shows that “.95% of homebuyers would consider a one-stop shopping model.”

What affiliated services & professionals does this include:

➢ Real Estate Agent

➢ Home Warranty

➢ Home Inspector

➢ Loan Officer or Mortgage Advisor

➢ Insurance Agent

➢ Title Agent

This list doesn’t include other convenient & optional providers, such as interior designers, handymen & a long list of wants and needs that buyers tap into when purchasing homes.

Nor does the article dig into the other required services & people, the homebuyer has no choice or control over, who work on their important purchase, such as:

➢ Appraisers

➢ Processors

➢ Underwriters

➢ Loan Closers

➢ Title searchers

Real Estate Agent’s Impact

If real estate agents don’t want to adapt and change with customer demand, they could be left behind.

Knowing that an agent’s firm offered OSS has a positive impact on buyers’ selection of an agent (up significantly from 68% in 2015 to 86% in 2019

Over half of home buyers (51%) say they would be more likely to consider a firm affiliated with their real estate agent, with nearly 1 in 5 (18%) saying they would be much more likely – suggesting the agent can have a significant impact on a home buyer’s choice of additional services. This consideration has close to double over the past ten years (29% in 2008)

Buyers are and continue to need clarity when it comes to the various people helping them during the home buying process.

Reasons Buyers choose Affiliated Companies

The two biggest reasons a buyer would want a one stop shop experience is primarily for efficiency reasons, combined with the notion that a group of professionals working together will save buyers money, even though the poll discovered that if cost savings were not there, they would still use affiliated companies due to the perceived value and belief that their odds of success are greater with affiliate companies.

Efficiency

If you are a realtor who has traditionally let your buyers choose who they want to use or given them a list full of people to choose from, you may want to rethink this strategy for a few reasons.

Customers value efficiency above all else and can’t afford to waste their time and money guessing where they might get approved and who is going to give them the best costs.

In the survey, only 32% of buyers felt confident that they understood the players and process involved when purchasing a home.

If we go back up to our list, the average buyer is required to engage & depend on up to 12 people, to get to the finish line, with the keys in their hand!

Imagine this:

Your knee has been hurting you for years, so you decide to go see your family physician who you trust. He tells you he needs you to get an MRI and gives you a list of places that will do MRI’s. One of the offices is 2 floors down, and the nurse offers to call down to see if they can squeeze you in, in the next hour.

What would you choose to do?

Go home and call 3 MRI offices or go down and get it done immediately, so you can discuss next steps?

With your MRI in hand, your doctor informs you that you need surgery, knee replacement most likely. Your next steps are to:

1. Get an X-ray

2. Blood work

3. See an orthopedic surgeon

4. Pick the hospital or surgery center to have surgery at

5. Choose a rehab clinic

Once again he gives you more information. One booklet is about the group of providers in his network, and in his building, with a map of office locations, names, services and best ways to schedule. It covers every service you need, without needing to step out of the building.

The second sheet is all the locations that provide X-rays. Another sheet is labs you can schedule to get bloodwork. The 4th pamphlet has a long list of orthopedic surgeons in your area, and the fifth sheet is rehab clinics.

Once again, what would you do?

The doctor has provided multiple options and providers to you, as is his professional duty, but when you ask him if he recommends one over the other, he tells you that there are many great surgeons and specialists, including the ones in his building & network and it is up to you, but if you choose to go with providers he is connected to, he can keep a close eye on your progress and check in on you after surgery. He is right here!

Satisfaction Among Homebuyers

Those who used one-stop shopping in their last real estate purchase have a higher satisfaction level than those who used multiple sources

Customer’s preferences & Awareness

Now let’s change the narrative and say that your doctor operates solo and not in a network, so you are sent home to read through the list of providers, choose and select where you will complete each of the steps on your to do list. While beginning to schedule the various appointments, your coworker overhears you working your way through the lists and tells you her Dad just had knee replacement and the entire experience went pretty smooth.

He worked with a group that all worked in a medical building and his Dad was able to set aside two afternoons where he got everything completed, met with the surgeon and then schedule the surgery in their surgery center for 4 weeks later. If you would like the information, she could ask her dad for the pamphlet.

Would you continue your medical scavenger hunt or take the information and end up back where we started?

Perceived Barriers

I believe, the barriers to offering and choosing the one stop shopping experience for homebuyers, is not seen by the customers, it is within our own minds as professionals. If you have not operated and referred this way for the past ten years, how are you going to get from where you are today to where the customer wants you to be tomorrow?

●     What does it even look like to offer mortgage, insurance and title as a real estate agent?                           

●     Are you even allowed to push people toward a more convenient option?

●     With limited knowledge or “how to” guidance, how do you begin to implement and change the way you advise homebuyers?

●     What about the loan officer and title company you have been referring to for the last 5 years? Where will this leave them?

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We will continue to show you how others in the industry are plugging into and creating their own one stop shop. We will introduce you to new concepts and breakdown the old ways to see if they are still relevant today. There is not one right way, there are multiple ways and finding the one that is best for you is the key!