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Hey, you! Yeah, Real Estate Agents.

Do you think about any of the following?

  • How can I create higher earnings for my team?

  • Can I create more income for my brokerage?

  • What can I do to elevate client satisfaction?

  • How do I add more value for my agents and team?

  • Who can help guide me to the solutions I need?

If it does, you’re in luck! Discover the power of practical steps, dynamic workbooks, and versatile templates on our portal. Enrich your knowledge with our courses and vibrant community or take a giant leap and partner with us to operate your very own mortgage brokerage. Join us and amplify your real estate success today!

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The Real Estate Industry is Facing Tough Challenges

You know that:

Making great money is a competitive real estate market is hard. Every move needs to be calculated with precision to ensure that profitability is maximized in a marketplace where every advantage counts.

But, did you know that:

Building off the business you already have is much easier. Expanding upon the existing foundation of your business can be significantly more straightforward. Leveraging the client base, partnerships, and market knowledge you have already established can lead to easier growth and development.

It is no secret that the real estate industry is experiencing some real challenges, from inventory shortage, higher interest rates and shrinking profit margins. Profitability in the residential brokerage industry is not easy to come by.

Low-cost office vs. traditional brokerage firms

Traditional brokerage firms, are not growing like the newer low-cost brokerage firms Low-cost brokerage models are growing and increasing market share faster than contemporary traditional brokerage firms, but are doing so at the cost of profitability whether measured on a per-agent or a per-transaction basis. It is also important to note that the results of this study do not include any results from related core services, such as mortgage, title insurance, escrow, property casualty insurance, home warranty income or property management results. In many cases, regardless of the model, these related services provide a material increase to the EBITDA that brokerage firms earn.

Newer firms are grab market share

Firms such as Compass, eXp, Fathom, HomeSmart and United Real Estate, all newcomers in this timeframe, grabbed nearly 400,000 closed transactions sides from incumbent real estate brokerage firms during this period.

What Are Your Options?

What are your options that add value to Customers & Your Business?

If you’re wondering how to grow your office operations & Income even as current market conditions seem never ending,  you might consider adding an ancillary business to your brokerage.


Traditionally, real estate teams and brokers have enlisted partnerships in subleases and shared marketing agreements.  The problem is that these income additions are capped and cannot go higher to match the growth you want.Ancillary businesses do not have caps on them, if you set them up in the right way. 

This type of addition offers your customers a new service or good that is related to or supportive to your primary business. Equally as important,  an ancillary service should diversify your revenue, increase your GCI per closed deal,  and help you weather most economic or industry slumps.

Ancillary Business Add Convenience

Adding an ancillary business will not only broaden the scope of your customer offerings but also elevate the overall customer experience. This strategic move can lead to a symbiotic relationship between your new ancillary business ventures and your core operations, thereby providing an immediate boost to customer satisfaction and potentially increasing loyalty towards your brand.

Consider the added convenience you experienced when you have used the following services:

Car Purchases

Imagine effortlessly enhancing your car ownership experience, all in one place. You chat with an expert finance manager and explore the addition of an extended warranty for peace of mind, and deluxe detailing services for that perpetual new-car shine—both seamlessly financeable. No juggling multiple contacts.

These premium ancillary services not only widen your choices but also provide you with added convenience by saving you time.

Doctor Visits

Remember your last visit to your doctor or specialty health care provider. Not only are you able to meet with your doctor but they may offer bloodwork, x-rays, sonograms, or even sell vitamins and supplements.

These are examples of an ancillary services that adds to the principal business’s income, while providing you, the consumer, with convenience.

As an owner of a real estate brokerage, look at ways you can streamline or enrich your customers’ home buying and selling processes. These solutions may be viable ancillary businesses. Services closely related to the primary functions of a real estate brokerage include:

  • Mortgage

  • Title

  • Insurance

  • Property Management

  • Home Warranty

Imagine, just like in the example above when you are buying a car, if after writing an offer with a client, you can introduce them to a loan officer that sits three doors down from you at the office.

Your client could conveniently meet the loan officer for 20 minutes, then the Insurance agent, and finally could be introduced to the title agent, so they have a familiar face on the day of closing, when emotions and stress is running high.

You have added value, convenience, and creating opportunity for your business.

Calculate Your Potential Earnings as A Mortgage Broker

Use our calculator to project your potential mortgage business income.

Why Mortgage is the Best Ancillary Business for Real Estate

Mortgage services are my favorite ancillary service to start with, as it is the “next step” for clients when they find a home, and the mortgage advisory will just as naturally recommend your insurance & title agents in the following steps.  In addition:

  • Mortgage can sell service above and beyond your buying clients.  Mortgage loans are not restricted geographically, like real estate is.  You can offer loans to buyers outside of your local community, and even to buyers in other states.

  • The Mortgage Broker model is less risky, as the wholesale lender takes on all responsibilities for underwriting and providing funds at closing.

Why A Mortgage Brokerage?

3 Type of Company Structures

If you aren’t aware of mortgage company types and structures, the main categories of how mortgage companies can be setup & owned are the following:

FDIC Bank

These are what you are most likely most familiar with. FDIC Banks are your local community banks.

Retail Lender or Correspondent

Think of these as the bigger lenders that only do mortgages through a loan officer you have done business with.

Mortgage Broker

Typically mortgage brokerages are a locally owned & operated small business that facilitates helping homebuyers and owners with securing home financing.

Don't Get Left Behind: Why You Need Mortgage

Industry leading resource, Housingwire.com has written many articles on the benefits of real estate professionals plugging into a mortgage company in the last few years.  They have a great article called Mortgage Join Ventures May be a Lifeline in a Tough Market.

When you have a minute we suggest that you read the article in full. But for now here area couple of key points.

  1. The Lender Model Joint Venture
    Thinking of joining forces with a mortgage lender? The lender model JV offers a powerful partnership, but it comes with a hefty price tag. Unlike simpler models, lender JVs require a significant initial investment (think at least a million dollars) to function smoothly and comply with regulations. The reason? Running a compliant and efficient lending operation involves substantial overhead costs. While the investment may seem daunting, it can be a wise move for real estate professionals seeking a high-reward partnership.

  2. The Broker Model Joint Venture

    If a million-dollar investment of the lender jv model gives you pause, then broker model JV might be the perfect fit. State regulations vary, but most require a much lower minimum net worth for brokers (think $25,000 compared to a million!). This translates to a significantly smaller initial investment for you. Plus, broker models leverage approved lenders for underwriting, minimizing your liability and overhead. The wholesale lender partner handles the heavy lifting on costs and potential issues, allowing you to operate with greater efficiency. This structure also shields you from some of the loan's liability, offering an extra layer of protection. All in all, the broker model offers a streamlined and potentially less risky path to a successful partnership.


Now, although the article is a great explanation of why the Mortgage Broker model is best, I have to disagree with one piece, that your ancillary company must be a joint venture. There is still another, better way when it comes to owning a mortgage brokerage.  I have spoken to many real estate brokers who have formed joint ventures due to the fear and overwhelm of opening and running another business, but within a few years, their opinion is that they could manage the business on their own and doing so would serve them better because:

  • They don’t feel they have control over primary decisions 

  • They are only receiving a percentage of the income, when they are sending a majority of the clients that generate the income

  • If they had the additional income, they could share profits with their agents, which would benefit recruiting and churn within the brokerage

Who Will Run Your Mortgage Company?

And You Have Absolutely No Idea Where to Even Start!

When choosing to add an ancillary product or service to your business, there are a few ways that you can structure the management and setup of the business.

  • Branch at a Lender

  • Joint Ventures

  • Plug & Play Models (Franchise)

Branch at a Lender

There are a handful of Retail Banks that offer real estate agents to be “a branch” of the lender.  What they don’t explain is that this means one and only one realtor can be paid on the loan originations that close.  This is because Loan Officers must be paid W2 income, and only to the LO that is licensed and tied to that loan.  That is unless, you own the mortgage company.  This is where joint ventures and Franchise models come into play.

Joint Ventures

These have been the most common structures in recent years, where a lender and real estate group will partner together to form a joint venture.  This allows the real estate owners to be hands off and the mortgage group receives a large percentage of the profits.  Perfect, right?! We don't think so and here is why.

  • Joint Ventures can be complicated and tricky, do you want business partners?  Or do you want to grow your business?

  • If you send 100% of the business to your mortgage brokerage, do you want 50% of the profits?  Of course not!

  • Do you like not being in control of who is hired, what money is spent

Plug & Play Franchise Model

The franchise model gives you the best of both worlds.  You own 100% of the mortgage business, while still getting 100% of the support of an experienced mortgage broker team.  When you own 100% of the business, you have the control to incorporate who you want and how you want it.  

The best part about Co/LAB- we understand your needs while running a Real Estate Business, so we built Broker Concierge, our operations support team that will take care of the back end heavy lifting.

What is Your Path to Financial Freedom?

We believe Co/LAB Lending’s Mortgage Broker Franchise & Mortgage Broker Concierge Services are your path to financial freedom.

Co/LAB is the only independent mortgage broker franchise model!

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