Ron Morrison – ?More generous?
Real estate agents in Massachusetts and across the country are helping homebuyers and sellers save money for their children?s college education and at the same time attracting more business to their firms.
That?s because this spring New Jersey-based Cendant Corp., which owns the Century 21, Coldwell Banker and ERA real estate franchises, has opted to participate in a college savings program created by a Brookline-based company.
Real estate franchises that choose to participate in the program set aside a portion of the brokerage commission they receive from transactions and give it to homebuyers and sellers who have registered with a college savings program created by Upromise. Part of the real estate office?s contribution will go to Cendant and Upromise for referral and administrative fees. The remaining money goes into a tax-deferred college savings account that the homebuyer or seller sets up with Upromise.
The homebuyers and sellers aren?t the only ones who will benefit from the partnership. Upromise, a two-year old company, will be generating new leads for Cendant?s real estate franchises by tracking and connecting prospective homebuyers and sellers with participating offices.
?I think it?s a great program,? said Ron Morrison, whose four ERA franchises in Middlesex County are participating. ?Anything that can benefit the public and increase our business has to be good for everyone.?
Currently, there are 60 real estate offices in Massachusetts that are participating, according to David Coppins, vice president of partner development for Upromise.
Coppins said participating offices are mostly clustered around Eastern Massachusetts because many agents don?t know about the program yet.
Even though Cendant signed an agreement with Upromise in April, the actual offer to participate didn?t occur until July.
?It?s an opportunity for the offices themselves to gain an additional market share in their areas,? said Coppins.
Besides increasing business, Coppins said agents will be helping families achieve two American dreams ? homeownership and a college education for their children.
Upromise is running advertisements on radio stations across the country, including the Bay State, and Coppins said many participating real estate offices are also promoting the program.
The amount of money the real estate franchise pulls from its brokerage commission to put into the savings account varies according to the commission rates and commission splits.
If a transaction involves a typical 6 percent commission split evenly between agents, 0.5 percent of the sales price of a home will be contributed ? or 16.67 percent of the commission the participating real estate office receives ? with a $3,000 maximum per purchase or sale.
For example, if the transaction involves a $250,000 home and the participating office receives 3 percent from the sale, the office would set aside $1,250.
The program is voluntary, but agents who work for a participating broker must also participate.
Morrison, who owns franchises in Westford, Billerica, Chelmsford and Pepperell, said he knows of only five ERA offices in the Northeast region ? his four and ERA The Webster Group in Andover ? that are participating in the program. But Morrison said many real estate offices in this state are unaware of the program yet and as word spreads more will join.
He also said he has spoken to many ERA office owners who believe that it is a valuable program.
It is not unusual for real estate agents to offer up part of their commissions as an incentive to draw more customers to their firms. For example, some agents offer cash-back or coupon incentives, said Morrison, who is president-elect for the Northeast Association of Realtors.
Contribution Concern
However, some agents have expressed concern about the Upromise program, saying the amount of money they must contribute to the savings account is far greater than the amount non-real estate companies donate. Other companies that have partnered with Upromise, including AT&T, America Online and General Motors, don?t have to contribute as much.
For example, General Motors has an agreement to donate $150 if a Upromise member purchases or leases a new vehicle, whereas real estate agents in some cases may contribute as much as $3,000.
?I guess if you compare it to that, we?re certainly being more generous than other companies,? said Morrison.
Others say they have a problem with the referral fees that get paid to both Cendant and Upromise. Nelson Zide, a broker owner of ERA Key Realty Services in Framingham, said the referral fee would have to be paid even if the home sale or purchase involves a former client that the agent has done business with before and is now participating in the Upromise program.
In those cases, Zide wonders why a referral fee must be paid if that client would have already approached the agent for help in selling or buying a home.
?Don?t get me wrong, I think the program is great,? he said. ?It?s just the way it?s been set up with the real estate community.?
Zide said he is considering joining the program.
Juergen Keller, broker owner of Century 21 Minuteman in Chelmsford, said his office is not participating in the program but he is open to the possibility of joining in the future.
?I have to admit I know very little about it,? said Keller.
Sellers and homebuyers who are interested in participating can visit the Upromise Web site, www.upromise.com, to register and select a participating Century 21, Coldwell Banker or ERA office or they may visit or contact the participating real estate firm directly.
Customers who have already been represented by an agent or real estate company or have signed a listing agreement, buyer-broker agreement or sales contract with a real estate office ? even with a participating Century 21, Coldwell Banker or ERA franchise ? are not eligible to participate.
The program is not available in 16 states, including Rhode Island and New Jersey.
If a person sells a home through a participating office and also buys a home through a program participant, he or she will receive a college contribution for both transactions.
