McGrath plans big expansion of broker business

McGrath Estate Agents has pointed to potentially large revenue streams waiting to be tapped, with less than 10 per cent of its clients using its finance arm.

Chief executive John McGrath said he admired the success being achieved by UK agency Countrywide, which converts more than half of its property clients into mortgage clients.

“It finds mortgages for around 58 per cent of its property sales, which is as good as I’ve heard anywhere in the world in terms of a success ratio,” he told Real Estate Business.

“At the moment, only seven to eight per cent of our deals are funded through our brokerage, so we see huge potential for growth.”

McGrath Estate Agents has 63 agencies, while its broking business, Oxygen Home Loans, had 29 loan writers as of the end of 2014.

Mr McGrath said the agency’s long-term goal is to have one broker in every one of its real estate offices.

“We think that anyone buying property through an agency should have the opportunity to discuss their financial needs with an independent broker within the business,” he said.

“Who wants to fall in love with a property and then have to spend time searching elsewhere for a broker or a bank when you get do it all under one roof?”

Mr McGrath also said that owning a broking business doesn’t just give McGrath Estate Agents another revenue raiser but also helps its agents win listings and sales.

However, linking agents and brokers is harder than it seems, he added.

“Agents are already subject to enormous amounts of rejection in their day-to-day job, so a lot of them don’t refer a broker to avoid facing more rejection,” Mr McGrath said.

“Even though we’ve had great success, around 25 per cent of our agents don’t seem to refer under any circumstances.

“Then there’s another 25 per cent who refer loyally and regularly, and then there’s 50 per cent that really depend on the relationship that the broker forms with them.”

Hockingstuart told Real Estate Business in December that it planned to diversify into mortgage broking in 2015.

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