Over the past 10 years, I've seen just about everything there is to see with the real estate team and mortgage relationship.
I've seen top producing teams execute marketing service agreements (MSAs) helping offset their lead costs. I've seen teams and brokerage purchase a mortgage business franchise - and then try to figure out how to be a mortgage brokerage. I've even seen some where the real estate team leader or someone close to them gets recruited over as a W2 employee on the mortgage business (way too much gray area here for me).
I've also seen the select few who go out and create their own, which I've seen go two ways—the ones who treat it like it's own business, with the right people in place... they crush it. The ones who don't give it that intentionality, it just ends up being a constant drag on the business they actually care about.
In my opinion, there's really only one way to do it.
My default mindset in business is "how do I simplify this?"
So my approach prioritizes two things: profit and simplicity.
Complexity is the enemy of execution. I'm obsessed with execution. So my approach has really become simplify, simplify, simplify. It's the only way to get things done.
That's especially true when you start to think about the mortgage and real estate relationship.
The MSA actually isn't that simple
When most people think simple, they think MSA.
"I'll find a mortgage partner who is willing to go in on generating some leads with me. We'll split that cost 50/50, I'll get twice as many leads for half the cost."
It's definitely a win. And for smaller teams who aren't doing at least 20 buy sides/month, this is probably the best option you have.
But I don't love the MSA model. I don't think it's as simple as it seems. Not if you want to do it right.
- There's a lot of complexity with the regulations around MSA, which are always changing.
- Whatever way you look at it, you're usually playing in the gray. At least a little bit.
- To do it right, there's a lot of moving parts that need to be managed.
- You're attaching yourself to a completely different business that you don't control, and this relationship often creates a lot of complexity.
- You don't own an asset or business. You are merely receiving monthly dollars for leads.
For a lot of us, this is the best option. When we were early on growing The Utah Life, this was all we had. It was good enough at the time.
As you evolve, you earn the opportunity to simplify
The biggest opportunities start to show up once you're hitting about 20 buy side transactions per month.
At The Utah Life, this is where we started to see the opportunity. For years we talked about starting a mortgage company. We had a great MSA, but there were just some things about it we didn't love.
- At scale, all the complexities from the bullets above just started to show themselves even more
- We didn't control the experience of our clients as much as we'd like.
- We didn't have any equity in the business we're referring over - we didn't own the business.
We also understood that if we wanted to change this and step into owning the mortgage side.... we'd have to do it right. We'd need to be all-in. And doing that meant a lot of learning, a lot of unknown, and a pretty steep learning curve.
That's why most teams, even the most competent ones in the real estate space, never end up crushing it in mortgage.
These reasons are definitely why we were stuck in a state of limbo for a couple years.
Just like so many things in business, the people are the solution
We wanted the control and the ownership without the complexity.
Partnership was the obvious solution—we needed to get the right people to help, people who could help us skip the learning curve—but picking a partner was tough. There were a million and one options out there who would have loved to start a mortgage joint venture with us.
Problem is, partnering with them would totally uproot our real estate business. We'd need to go persuade a bunch of agents to change the most important partner (loan officer) they work with on every single transaction. New processes for hand offs that would need to replace the already established, habitual ones.
Tons of complexity there.
And then the idea hit us. What if we didn't need to force agents to change anything?
They all had a loan officer that they love working with, who they trust to put out quality work every time. It was him that they had some affinity to—NOT the company he represented.
What if that great loan officer, who already plugged into our business represented our business, instead of someone else's?
This was the missing link. I can't believe it took us two years to realize it. And that little piece right there helped us simplify so many things:
- No need for any team leaders or admins to get licensed in mortgage.
- No need for agents to change who they work with.
- Complete control over the client experience and equity in the referrals we're sending over.
The coolest thing is, that loan officer is now crushing it on a personal level. Making way more than he ever has. Way more emotional engagement in the business, because he's now incentivized properly.
Everything about this has been a huge win. We have a roaring mortgage business that takes almost no effort from our end, because we have the right people in place.
We packaged this for all the teams we work with
We've packaged up this same playbook and made it readily available to the teams we work with here at Sisu.
We went out and started a business with some of the brightest minds in the mortgage and RESPA space. This became Sympli, which is the same operating backbone we use to power The Utah Life's mortgage arm.
This creates the structure where your favorite loan officer can just plug in and play.
The process of getting started is significantly more simple than any other of the approaches I mentioned earlier—it's even simpler than just signing an MSA.
- We have all the business structure in place, and you'll be a full owner in the business.
- We go out and recruit the LOs, starting with the ones your team already works well with. Just like so many things in this business, recruiting solves all problems.
- We have the infrastructure to process all the loans, you'll never have to think about that
- The business model makes an emphasis on earning business outside of what you will refer to it. This is critical because it doesn't just create a more profitable business, it creates a more legit one.
This is by far the simplest way to start creating additional income streams and businesses around your already successful real estate business.
Who is this for?
Like I mentioned earlier, it's at about 20 buy sides/month that these doors start to open for you.
If you're not there yet... I can tell you the easiest way to get there.
You need to recruit more agents, in a way that adds to your culture and makes it even stronger, higher accountability.
Which is what we do here at Sisu. We give you the systems you need to attract the right agents into your business (ones who crave accountability), and then make sure you've got all the right systems to actually hold them accountable and ensure that the right culture fits always hit their goals.
I talk all about our journey to that point here, if you want to check it out.
If you are already at that 20 buy side/month number, or if you're getting close... shoot me a message at briancharlesworth@sisu.co. I'd love to have a deeper discussion and see what's possible.
