Parent company Better Mortgage is rapidly expanding its real estate brokerage and title insurance services, arguing that integrating these services into a single technology platform will help it outperform competitors that are more focused on specific segments of the real estate transaction. …
Better HoldCo Inc.’s most famous subsidiary is probably Better Mortgage Corp., which opened in 2016 and made $ 25 billion in loans last year. With addition Minnesota, Vermont and Virginia in April Better Mortgage now licensed in 47 states and Washington DC
But the Better group of companies also includes Better Cover LLC, a homeowner insurance provider, and Best settlement services – which, recently opened a store in Virginia, now provides title insurance in 24 states.
Better’s subsidiary real estate brokerage, Better Real Estate LLC, went largely unnoticed. Earlier this year, Better Real Estate had “just a few” of its own agents, said Christian Wallace, who took over as Better’s head of real estate services in March.
Today, Better Real Estate has about 150 active agents in 12 states and is adding 50 to 100 more agents per month with the goal of hiring 500 agents in 20 states by the end of the year, Wallace told Inman.
Better Real Estate is currently licensed in Arizona, Colorado, Florida, Georgia, Illinois, New Jersey, New York, North Carolina, Pennsylvania, Texas, Virginia and Washington. , Tennessee and Washington, DC by the end of the year and will have licenses in all 50 states by the end of 2022, Wallace said.
It is better currently looking for regional managers, real estate agents and deal coordinators. Wallace said one thing that helps Better Real Estate grow so quickly is that agents are W-2 employees who are paid salaries, not commissions. They also enjoy benefits such as equity capital, health insurance, and retirement.
Other real estate brokerage companies – Redfin and ZipRealty among them there are experimented with paying agents as employees rather than independent contractors, but most of each agent’s pay is usually based on incentives (Redfin says first-year agents typically earn 30 percent of their salary from base salaries and 70 percent from transaction bonuses).
Better also offers performance bonuses, but the base salary is typically between $ 75,000 and $ 100,000 per year, depending on the market. For comparison: average gross income $ 43,330 for a typical realtor in 2020.
Wallace said Better Real Estate is hiring people with a variety of backgrounds, from veterans who can manage and train new agents to relative newcomers to the industry who are willing to embrace the company’s philosophy.
“We are looking for people who have essence and perseverance and who really want to build something,” she said.
For consumers, Better Real Estate offers 1% commission refund buyers together with USD 2,000 in credit loans from Better Mortgage. Better Mortgage also offers appraisal guarantee this allows Better Real Estate clients to avoid the contingencies of the appraisal when they make an offer and keep the same credit conditions if the appraisal is lower.
Wallace said about 90 percent of Better Real Estate’s clients go through a pre-approval process. Agents receive between 30 and 45 qualified leads per month, and while there are no sales quotas, they close about 3.5 deals per month.
Although many real estate brokerages have mortgage partners or affiliates, the “attachment rate” – the percentage of clients who receive a mortgage through their real estate broker – is usually only about 20 percent, according to industry expert Mike DelPrete.
Better Real Estate has a historic attraction rate of almost 70 percent, Wallace said – and that’s without FHA and VA loans. “We’re going to get almost 100 percent,” with the addition of FHA and VA loan products, she predicted.
Better Mortgage clients often have homes that they need to sell, so Better Real Estate will also have a standing stock of offers, Wallace said. To attract sellers, the company is piloting Dallas Zero Commission Listing Model, with a waiver of listing fees for sellers who also use a Better Real Estate agent when buying a home.
Wallace said sellers will decide when listing their home what compensation to offer buyer’s agents when listing their home. If the buyer is represented by Better, the seller pays no commission to the listing agent or buyer’s agent.
Selling a home for $ 500,000 is a savings of up to $ 30,000 over the traditional 6 percent commission charged by listing brokers, split with the buyer’s agent.
Better Real Estate plans to roll out a zero-percent listing fee model this fall in the rest of Texas, as well as other markets where it does business, as it is staffed to meet demand.
Wallace said she expects a zero percent listing offer to attract a lot of sellers and “we’re trying to figure out what that looks like in terms of capacity. I don’t want to release a product that I don’t have employees to support. ”
In the recent investor presentationBetter HoldCo – which announced plans to go public in May as a result of a merger with a Special Real Estate Acquisition Company (SPAC) – said it was involved in $ 691 million in real estate transactions last year, including deals entered into by partner agents.
With a fast-growing team of in-house real estate agents, Better expects to close $ 2.4 billion in real estate sales this year, with sales forecast to rise to $ 17 billion in 2023. This will put Better Real Estate in the same company as the others. founded real estate brokerage companies such as @properties and William Raveis.
Better argues that the key to better customer service at a lower cost is to integrate mortgage, brokerage, and title and closure services into a single technical “home ownership support platform.” Companies that would consider each part of the deal separately would be at a disadvantage.
“It’s all about helping the buyer,” Wallace said. “We’re just expanding [Better founder Vishal Garg’s vision for mortgages] in real estate. People want to understand what they are paying for and what they are getting, and most importantly, to make this process smooth and accessible. “
Real estate broker Compass also touts a “hassle-free and transparent experience for agents and their clients” as a motivation for OriginPoint launch, a retail mortgage lender guaranteed rate joint venture that supports similar joint ventures with @characteristics as well as Realogy… And the parent company of eXp Realty is creation of a joint venture, SUCCESS lending, with the mortgage company Kind Lending.
A growing provider of title and settlement insurance services, Doma, sees real estate agents as a key area for growth. offering an unbranded version with a “white label” digital title insurance, escrow and platform closure.