Developing Affiliate Relationships

A traditional one-stop shop brokerage model is not the only option for brokerages that are thinking of bringing value-add services in-house.

Many agents have their own network of affiliates they work with and refer to clients (lawyer, mortgage officer, etc.), but the difference between a network of affiliates and in-house affiliates comes down to one thing: a choice. In-house affiliates give agents the opportunity to have another preferred network of affiliates within their organization, allowing them to have a greater level of control and communication during the transaction. For instance, should something go wrong, agents at a full-service brokerage can reach the key decision makers within the mortgage and title companies much more quickly than if they were calling on an outside company.

The goal of the brokerage should be a simple one: add value. Only offer a service if it adds value, whether that value is an in-house mortgage lender or one who is a phone call away through an agent’s trusted affiliate network.

“Our primary business is real estate brokerage, and our relationships give us the ability to provide additional services and value,” says Golden. “Our affiliations save clients time and offer buying power – we can get clients a better deal and assure a better experience with a quality mortgage broker. We have an attorney who works out of our office, and he provides a high level of services to agents. He provides our agents with free legal counsel, offers legal services to our clients, and can facilitate things getting done that might not otherwise be accomplished. It is about providing our clients with services and value.”

Affiliate relationships offer the possibility of increasing a brokerage’s exposure due to the combined reach of each partner’s relationships. Also, a recommendation for an affiliate company is the ultimate endorsement for its level of service, and Golden says it can ultimately affect the reputation of the brokerage making the recommendation.

“Our relationship with Guaranteed Rate, for example, not only provides a smoother transaction for our clients; it is also an advantage for us, because teaming up with Guaranteed Rate gives us more visibility with clients,” he says. “Our affiliations give us a higher level of accountability in every transactions. We are more accountable for services we recommend when we provide resources.”

How to Tell if Your Brokerage is Ready to Take on More Services

The growth and volume of a business is a strong indicator if a brokerage is ready to add more services.

For example, mortgage and real estate go hand in hand – 98 percent of clients need a mortgage, according to Golden. Over time, brokerages first started to grow more affiliate relationships as they saw the need, and some have eventually created companies that serve client needs in-house, such as Key Mortgage and Baird & Warner Title Company, as well as Ryland Title and Ryland Homes Mortgage. Ryland has offered mortgage services since 1978, financing over 250,000 homes.

“We continue to adjust to market conditions, and in 2009 we implemented the preferred lender program here in Chicago to better serve our buyer’s needs,” says Condon. CA