Two industry experts share the shrinking commission solution

Each year, the RE/MAX R4 convention attracts a growth-minded crowd. The event is a pure torrent of entrepreneurial spirit and housing know-how. This year, RE/MAX offered both in-person and virtual sessions. In two sessions (one live and one webinar-style), Ward Morrison, president of Motto Franchising, LLC discussed the value of adding mortgage services to a real estate brokerage. In compelling interviews with brokers and mortgage professionals, Morrison uncovered several benefits that support growth:

1. Added income potential
2. Enhanced agent recruiting
3. Differentiation among brokerages

Added income potential

According to Morrison, tightening broker commissions continue to squeeze owner incomes into 2021. As real estate brokerages compete to retain top-earning agents, they often agree to splits skewed in the agents’ favor. At the same time, brokers are increasingly pressed to invest in innovative marketing, technology and other resources in order to retain those agents. In this type of highly competitive market, an additional revenue stream has the potential to move the income dial. 

Dustin Oldfather, a real estate brokerage owner, described his experience with Motto Mortgage as a liberating opportunity. For Oldfather, the addition of the Motto Mortgage franchise to his family’s business portfolio has not required as much time or energy as he anticipated, which has made the investment even more rewarding.

“Right now, my involvement is about 1-2 hours per week, and my wife Mariya – as the operator- spends about 10 -15 hours a week. I don’t want to overstate it, but it’s completely changed our lives.”

Enhanced agent recruiting

We all know how valuable great real estate agents can be. That’s why any recruiting edge is an edge worth having. Proximity to reliable and well-respected mortgage services can be very enticing to busy real estate agents. 

As Oldfather explains, the Motto Mortgage brand has a great reputation in the marketplace. “Agents know they can quickly have a conversation with one of our loan originators. They can get a pre-qualification letter out of the gate. They know they’re going to get great service.”   

The close proximity between the agent and the Motto loan originator also adds value. “Sometimes borrowers do things that can make you scratch your head, right? We [Our agents who work with our Motto Mortgage professionals] can start to grease the wheels versus dealing with ‘lender X’ who unexpectedly is out on a Friday and the closing is at 5p.m. You’re controlling that experience, which also adds a lot to the agents’ advantage in the marketplace.”

Differentiation among brokerages

Market competition exists far beyond agent recruiting and retention. Would-be customers often experience a barrage of real estate services marketing. So, how do you stand out to homebuyers and sellers? You offer a better experience. 

PwC’s customer experience survey found that 43% of consumers would pay more for greater convenience (2018). And, for an overall better experience, they would be willing to pay up to 16% more. As Morrison pointed out, “To be competitive today, you not only want to grab dollars, you also want to grab control of that consumer experience. You should move across the home buying lifecycle.” Real estate brokerages that understand how important this approach can be may have an edge in creating customers for life. 

Similarly, the complementary services offered by a one-stop brokerage may be able to attract consumers who are seeking a more convenient home buying experience. Once clients, they may be more likely to use the brokerage’s other services. 

Motto Mortgage as a growth solution

Motto Mortgage offers a valuable solution for real estate brokers and teams seeking to add potential revenue, enhance agent recruiting and differentiate themselves in the competitive housing market. The franchise model and brokerage-in-a-box solution provide a faster and more reliable path to business growth. 

When Dustin Oldfather looks back on his decision to own a Motto Mortgage franchise, he becomes reminiscent of the support he received. He was able to continue focusing on his real estate business while he and his wife were getting their Motto office up and running. “What I’ve loved about it is it’s not overly complicated. And, from a business ownership perspective, it’s been fun. Having the Motto Mortgage team available to help with that and make sure it was moving forward. It reinvigorated us as business owners and also made us look at other parts of our business differently.”