Banks pay real estate agents for home loan referrals
Mortgage brokers aren’t the only people involved in the housing market to be paid commissions by the banks: all five of the major home lending banks have confirmed they pay in some form people such as real estate agents for referrals for home loans.
Wednesday, May 26th 2004, 11:20PM
by Jenny Ruth
BNZ spokesman Owen Gill says his bank has not and would never pay cash for referrals. However, "there are some instances where we give people some Flybuys." Flybuys points can be redeemed for a wide range of goods and services, including travel and accommodation.
That suggests BNZ’s campaign really should be making it clear that although it has cut out some middlemen, it hasn’t cut out others.
Gill says only the bank’s mobile mortgage managers, of which there are about 60 nationwide, have the power to grant real estate agents Flybuy points in exchange for referrals. "Other people selling our home loans – it doesn’t operate for them. We’ve made these arrangements transparent," he says.
Agents who are likely to receive Flybuy points "must disclose that’s what’s going to happen," he says.
"Where a transaction goes through and we think the customer still needs to be informed that the agent will get some Flybuys, we will disclose."
Other banks such as Westpac and National Bank operate their own points schemes.
National Bank spokeswoman Cynthia Brophy says her bank operates a program called "Prestige Plus which awards points on a referral basis to a number of parties, such as real estate agents, accountants and solicitors." The bank’s staff aren’t involved in the referral program, Brophy says.
Westpac spokesman Paul Gregory says it offers real estate agents the possibility of earning "Hot Points" in exchange for referrals. The points can then be redeemed for gift vouchers.
"What we do have in place (and I'm told it's not widely used) is something our mobile mortgage managers run which is essentially a relationship-building tool for key referral sources (these may include land agents)," Gregory says.
ASB Bank head of retail banking Barbara Chapman says it also has an intermediary referral system based on completed loan deals, but that she doesn’t wish to disclose the details of the payments offered for competitive reasons.
"Our arrangement fully complies with the Secret Commissions Act," Chapman says.
ANZ spokeswoman Cathy Wood confirms her bank also pays for referrals.
"Real estate agents can receive a cash payment from ANZ for a successful referral. The agreement notes that the commission must be disclosed to the customer," Wood says.
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