When you talk to a bank loan officer
these days, don’t be surprised if you
get two different business cards: the banker’s normal card and one identifying the
bank’s realty services company.
“Specialized realty services are a natural
progression for the financial institution that
already has highly developed competencies
in real estate-based financing,” says Vince
Cassano, assistant vice president, business
development, residential/commercial mortgage, Brentwood Bank.
“Many banks that came out of the savings
and loan tradition have a long history of providing mortgage loans, and many of those
institutions now offer more complex construction loan financing, as well. Some have
also developed advanced commercial lending capabilities, and a few have evolved into
multimillion dollar commercial real estate
lenders. Creating an entity that offers realty
services fills in a missing piece, facilitates real
estate-based financing transactions and benefits a customer that the bank is already serving, which is what originally led bank customers to request them.”
Smart Business spoke to Cassano about
what banks can provide in the way of specialized realty services through a separate
realty company, and what these services may
say about the institution offering them.
How many banks also have a realty service?
There aren’t too many institutions that have
ventured into it, and there may be several reasons. The process to get up and running is a
little complex and involved. For instance, to
sell real estate in Pennsylvania, a state-chartered bank must be approved by the
Department of Banking and licensed by the
Department of State. Initially, there may also
have been some reluctance because it was
perceived — or portrayed — as a potential
threat to traditional real estate agents, as if
banks were looking to go into direct competition with them. That really hasn’t proven to
be the case, however.
Instead, realty services may be positioned
both to complement existing real estate-based loan services and as a convenience to
the bank’s existing customers, especially
business customers with commercial loans
and other specialized requirements.
What advantages can a realty service offer?
For the smaller, more specialized bank,
realty services make the organization that
much more proficient, capable and versatile.
Likewise, a senior loan officer who also
maintains real estate sales agent credentials
is going to be more knowledgeable in transactional issues, back-office servicing, closing
and documentation requirements, etc. A
hands-on understanding of the process translates into the ability to turnkey a deal faster,
without sacrificing transactional integrity.
More importantly, that kind of lender is
going to be more valuable to the business
customer, both in the short term (where the
immediate transaction is concerned) and
down the road, as a future resource. So
there’s a potential upside to seeking out a
bank that has an entity to provide realty services that go beyond any one transaction.
How does the bank integrate realty services
into its offering?
It really depends on the size and type of
organization. If the bank is relatively small
and you work directly with a hands-on
lender, that individual may also maintain his
or her own real estate license, giving you both a lender and a licensed real estate agent
in one person. In that case, the integration
will be about as seamless as it gets, at least
from the standpoint of whom you will be
dealing with. You don’t have to get handed off
to someone in another department.
The benefit of this really becomes evident
when changes come up that weren’t originally anticipated. There are going to be things
that are out of your control, and the more
flexibility you have, the better. A combination
lender and realtor gives you one person who
can help you keep your project moving.
What type of bank customer is most likely to
utilize these realty services?
Local builder-developers are probably the
customers who will get the most use from
realty services being offered via a separate
entity like this, simply because those services
apply to every phase of the developer’s activity. The bank can facilitate the entire process.
On the front end, the realty service can perform property searches on behalf of the
developer, and the bank can provide initial
financing of the property and infrastructure.
Then, the bank can help builders finance
spec construction, while its realty service
provides property listings on the MLS (multiple listing service) and facilitates the sale of
lots. On the back end, the realty service can
provide market analysis and perform a listings search, and the bank can finance the
purchaser’s construction loan and permanent mortgage.
What does creating a realty services entity
say about a bank?
It says the institution is looking for more
ways to serve its customer and create value.
For those looking to purchase new property,
it means the bank can not only finance your
house or commercial building, but also,
through its realty service, can help you find it
and help you sell your current property. It
says the bank has a niche and a core competency in real estate-based lending and transactional issues, and it’s a reflection of the
institution’s depth of capability.
VINCE CASSANO is the assistant vice president, business development, residential/commercial mortgage with Brentwood Bank. Reach
him at (412) 409-9000, x285 or via e-mail at [email protected].
