As the real estate market remains strong in most of the West, two credit unions are reminding their members they can earn cash back on their home purchase or sales transactions by participating in financing rebate programs.
Members of both Wescom Credit Union here and Olympia, Wash.-based Washington State Employees CU can collect rebates of up to 20% of their real estate agent's 3% commission.
Both credit unions require members to enroll in the program before they begin working with a real estate agent, and they must use participating Realtors. WSECU has an exclusive relationship with Coldwell Banker; while Wescom works with Coldwell Banker, Dilbeck Realtors, Prudential and Professional Agent Referral.
George Shipman, vice president of real estate lending for WSECU, told The Credit Union Journal the rebate programs of both his CU and Wescom originated from a common source-the Southern California credit union real estate network, or CUREN. A CUREN is a regional group dedicated to the real estate lending areas of credit unions. CURENs allow people from real estate departments to share expertise, best practices and strategy (CU Journal, July 21).
"Before coming to Washington State Employees Credit Union, I was based in Southern California, and I belonged to the CUREN group there," explained Shipman. "One problem that came up frequently in conversation was credit unions could not hang on to their members once they went into real estate transactions. Credit unions would invest a lot of work getting members pre-qualified, then realtors would steer those members to their favorite lenders."
"That happened a lot," he added. "Realtors always had cozy relationships with banks, and credit unions didn't get any business."
Several of the credit unions that belonged to the Southern California CUREN in the late 1990s crafted a rebate program and forged a relationship with Fred Sands Real Estate-a company that was later bought out by Coldwell Banker. When Shipman moved to WSECU in 1998, he established a rebate program there.
"It is a wonderful program because everybody wins," said Shipman. "The credit unions receive no money from the program, but they are able to service the loan. The real estate broker gets steady referrals, and members get unexpected cash back."
Tom Orman, Wescom's vice president of real estate lending, said his CU evaluates the program's realtor partners based on member feedback.
"The Realtors are screened for quality and service," he said. "The program is great for Realtors, because they get people lined up who are ready to buy and pre-approved. Also, it is a valuable program for the members. Besides getting a great deal, they are being put in touch with realtors that have been carefully screened. We are confident they they'll get good service, just as if they were at Wescom."
"It's a win-win. What's not to like?" Orman added.
WSECU's Shipman said the credit union must advertise the rebate program continually to keep it on the "radar" of members.
"When people hear about it, they usually are surprised the benefit exists," he said. "Then, they start looking for an ulterior motive. They can't believe how easy it is."
Members who have used the rebate program usually give it high marks in surveys, Shipman reported.
Wescom promotes its rebate program three ways: regular features in the monthly newsletter that is sent to members with their statements, in the monthly newsletter to the CU's sponsor companies, and on its website.
Orman said most Wescom members are aware of the program, but the CU would like to raise its profile even more in the coming months.
"We've been in a refinancing market for some time now. We are hoping as we move forward, and so many people already have refinanced, we are focusing even more on purchase financing," he said. "And the rebate program will be an important part of that."
WSECU said its members received more than $103,600 in rebates during 2002. Orman said Wescom members were paid approximately $30,000 on 35 referrals last year.
He expects that number to increase this year, as Wescom already has made 60 referrals to the program in 2003.
WSECU has more than 120,000 members and $991 million in assets. Wescom serves more than 200,000 members and has assets of $2.4 billion.