A new approach to homebuying, in which a real estate agent or another single source oversees all shopping and financial arrangements, is gaining momentum.
This one-stop approach, in which appraisals, purchases, loans, and insurance are obtained through a point person, is becoming "mainstream," according to a study by Weston Edwards & Associates.
The shift from dealing with individual lenders, homeowners, brokers, and attorneys creates opportunities for mortgage companies, said Weston Edwards, president of the Laguna Beach, Calif., consulting firm.
"This is a new relationship lenders can have" with key real estate agents to build origination volume, Mr. Edwards said.
Indeed, the realty channel is starting to take its place beside retail, wholesale, and correspondent arrangements as a way to build business, Mr. Edwards said.
Unlike two years ago, when a Weston Edwards survey showed little interest in the one-stop approach, the trend was evident this year in the firm's survey of over 200 real estate agents, lenders, and other service providers. Lenders are taking to the idea of serving as a source of funding and a conduit to arrange appraisals, title searches, and other services.
Some major lenders, including GMAC Mortgage, are already starting to set up units to build relationships with giant realty firms. Smaller lenders can hook up with local firms.
Homebuyers will benefit through such arrangements, Mr. Edwards said. Real estate agents can say that they've shopped the market for the customer and put together a list of the best-priced firms, Mr. Edwards said.
Mr. Edwards said his study indicates that real estate agents are open to these relationships. Though most agents were losing money a couple of years ago, they have helped build profits today by engaging in "realtor-based lending" through affiliations with mortgage lenders, he said.
The concept has merit, mortgage bankers said. "This is a great jumping point to test strategies and formulate competitive responses," said Terry Rowland, executive vice president in charge of production at First Nationwide Mortgage, Frederick, Md.
In fact, mortgage bankers may have no choice but to align with real estate agents, Mr. Edwards said. "Lenders' efforts to end-run real estate agents have been unsuccessful."
The study found that most prospective homebuyers look to real estate agents for advice about whom to borrow from. "First-time homebuyers are almost totally directable," the report says.