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RESPRO Panel: Affiliated Business Model Huge Help to Homebuyers
By James Comtois
A
panel of real estate executives spoke at the Real Estate Services Providers Council Fall Seminar in New Orleans
on how the integrated sales process offered by companies using the "affiliated business" model helps
keep potential homebuyers accurately informed in an unstable real estate market.
The four member panel, "Grow Your Real Estate Affiliated Business in Today's Market," addressing members
of national real estate services companies, agreed that educating consumers and streamlining the selling process
is key to addressing their fears and restoring activity in the marketplace.
"Consumers are craving information and the tools to interpret it," said panelist Patrick F. Smith,
president of Alabama-based TitleSouth and General Counsel of Realty South. "There are a lot of questions on
the mind of consumers today. They want the assurance and knowledge that buying a home today is not a decision they
will regret tomorrow."
"Many potential buyers have been so stricken with uncertainty regarding the availability of financing that
they are choosing to do nothing," said Dan Jaqua, president of Jaqua Realtors in southwest Michigan. "Trying
to allay those fears and establish consumer confidence, at least as it relates to real estate, is our biggest challenge."
Gerard Griesser, president of the Trident Group/Prudential Fox and Roach and moderator of the panel, agreed.
"Two months ago customers were afraid that buying a house might not be a good decision," he said. "Now,
that fear has shifted to a fear that financing will be unavailable.
"It is becoming a self-fulfilling prophesy," Mr. Griesser added. "Consumers are frozen with fear.
People are becoming convinced financing is not available, so they don't even go to a lender to apply. If they don't
apply, they certainly can't get a loan."
"Fear of being unable to finance a home is a dominant factor in the market today," said Mark McGoldrick,
east division president of HomeServices Lending. While noting that credit policy restrictions have created specific
lending challenges in Florida and southern California, Mr. McGoldrick said that most of the country does not face
the same difficulties. "We need to do a better job of communicating to potential customers that we have money
to lend. Standards are certainly tighter than they were two years ago. But for people with good credit and cash
for a down payment, financing is definitely available."
Mr. Smith said that the affiliated business real estate model, with one provider offering brokerage, lending,
and title services, helps make certain the information consumers get is accurate and consistent because the affiliated
business model by its nature pulls all information together in one place. "The affiliated business model lets
us build a database of all information related to a transaction in a centralized location. This helps assure that
the customer gets information that is timely and accurate. It eliminates multiple points of contact for the consumer
and at the same time eliminates multiple opportunities for confusion and misinformation."
Mr. Jaqua agreed that the affiliated business model, which is becoming increasingly popular, provides significant
benefits to the customer as well as the service provider. "We can't just provide information to the consumer,
we need to help them interpret it," he said. "Having affiliated businesses handling all aspects of the
transaction helps provide better information to the consumer and creates an easier process for purchasing a home."
Mr. Smith pointed out that concerns some may have about a group of affiliated companies putting the consumer
second are unfounded.
"When affiliated businesses work together as one through the selling process, that isn't a conflict of
interest," said Mr. Smith. "It's a convergence of interests. Our interests include making a smoother
and more understandable transaction for the consumer."
RESPRO is a national, nonprofit trade association of real estate broker-owners, real estate franchisers, mortgage
lenders, title insurers and agencies, homebuilders, technology companies, home service and settlement service providers
united to deliver services to consumers through strategic alliances across the homebuying industry.
