SAN FRANCISCO–Long Realty Co.’s title joint venture has a 66 percent capture rate. Its mortgage company joint venture, only about 10 months old, already captures 35 percent of customers.
Long Title Agency is now in the No. 1 position in its Arizona County, said Wissy Wendt, SVP of affiliated services for Long Realty Co. The mortgage joint venture is number three in the local marketplace.
One of the keys to that success, Wendt said, is never viewing those customers as ‘captured’ business.
“There is only earned business,” Wendt told about 100 people at a breakout session on “Deep ancillary partnerships” at Inman News’ Real Estate Connect 2004.
She was joined onstage by Ed Krafchow, president of Prudential California Realty, and two mortgage industry representatives: Mark Mead, Bank of America’s national partnership infrastructure executive, and James Panepinto, SVP of strategic business development for Countrywide. Chuck DelGrande, managing director of Presidio Merchant Partners’ real estate services sector, facilitated the panel.
Each gave his/her view on what makes such partnerships between brokerages and other companies, such as mortgage and title, successful.
Wendt sees the ability to create a new, intentional culture as important to the success of those partnerships.
“It’s a brand-new business,” Wendt said. “You have no legacy thinking, no old equipment. You can do what you want to do.”
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Companies also must not “silo” ancillary services, she said. Instead, they should be viewed as part of the overall business of home-ownership services, not just part of a company that focuses on real estate.
Krafchow also touched on the issue of company culture, saying he could think of no more diverse set of personalities than those found in the real estate, mortgage and title companies. For example, he said, the brokerage business is less acute about numbers, whereas mortgage companies are extremely acute about them.
To form effective partnerships, companies must move beyond those differences and create something that is not superficial, as many relationships have been between brokers and title and mortgage companies, Krafchow said.
The only way for that to happen, he said, is for both sides of a partnership to share in the equity and the risks of the partnership. Brokerages should have a stake in the partnership’s success, not simply being accepting marketing dollars from a mortgage company that puts a branch in the broker office.
“You don’t want to run this as a branch of the mortgage company,” Panepinto said. “It has to be part of the real estate company.”
That approach reinforces that it’s part of the home-ownership industry, he said.
He also offered other factors he views as important to making partnerships successful. The joint company must hire passionate and experienced loan officers who can fit in with the real estate brokerage culture. They must be focused on providing the highest level of customer service to both consumers and agents. The new company must be able to offer both competitive prices and products. And sales associates must be a part of the philosophy and vision of the new company.
To be successful, real estate partnerships must add value to the real estate agents, Mead said. Bank of America tries to do that by generating leads and offering both online and offline tools and a range of financial and insurance services, he said.
He encouraged brokers in the audience to decide what level of partnership appeals to them and to find a company that can evolve along with theirs.
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