Real Estate Firm Adds Mortgage Counseling To Services

A major player in the East End real estate market is launching a new service, providing in-house mortgage counseling in addition to financing, with a philosophy from a time before the mortgage industry became intensely competitive.

Douglas Elliman Real Estate, with nine East End offices and 350 brokers, says its Mortgage Navigator program, which starts this month, brings back the notion of putting a buyer’s needs before short-term financial gain, and is counting on the idea that there’s a bigger payoff in long-term relationships with clients, as well as the word-of-mouth marketing that could result.

Mortgage Navigator is the brainchild of Jamie Whitall, 63, a Southampton mortgage professional with 20 years of experience handling complicated, high-end mortgages, and a long-held dismay for the way his industry has evolved into a cash-grab, which both predicated and fed on the recent credit crisis. He sees the new venture with Douglas Elliman as a chance to do business the way he prefers: “I need to have something I really believe in to motivate my passion,” he said last week.

After working for a variety of mortgage brokers, including GuardHill Financial Corporation and, more recently, Manhattan Mortgage, he said he approached Douglas Elliman officials with the idea of a “trust-building opportunity” with clients, bucking a long-standing industry trend of simply reaping fees, and often allowing a client’s confusion with the world of ARMs, rate caps and a widely varying overall cost of funds to work to a provider’s advantage, at least in the short term. He calls it, simply, “stupid greed.”

He found a sympathetic ear.

“If you’re in the business, you know what’s out there,” said Paul Brennan, Douglas Elliman Real Estate’s Bridgehampton-based regional manager. “Given that the mortgage business is dog-eat-dog, you’re limited in what you can offer a customer, because of who you work for.”

With Mortgage Navigator, he said, it’s a much more labor-intensive process to review each individual client’s financial situation, and determine which of the countless options is the best fit before an application is filed, but it’s about building a relationship. “It’s a throwback to what mortgage people used to be like,” said Mr. Brennan, who has been selling houses on the East End for 33 years. “What I say to the public is: Come to us, and we’ll research what the best mortgage is for you—and it might not be with us.”

Mr. Brennan said he was encouraged by his past dealings with Mr. Whitall. He had forwarded a client with a particularly complicated financing dilemma to Mr. Whitall, and he was able to counsel the buyer and eventually find a lender—though, because it was with a company other than the one Mr. Whitall worked with, he “didn’t make a dime,” Mr. Brennan noted. “But he made me look good,” he added.

A similar philosophy is the basis of Mortgage Navigator, Mr. Whitall said. It’s an idea he had pitched to another East End real estate firm as early as 2000: He provides counseling services to any Douglas Elliman buyer who is interested, free of charge, taking a close look at a buyer’s financial situation, and shopping around for the mortgage that fits best. It might come from DE Capital, which is Douglas Elliman’s in-house mortgage provider, and if it does, Mr. Whitall earns a commission. But it just as well might not.

If there’s a better mortgage out there, neither DE Capital nor Mr. Whitall will “make a dime.” But the hope is that a smooth, satisfying transaction will make the buyer more apt to return to Douglas Elliman in the future, and tell friends and acquaintances about the experience. Meanwhile, buyers can get free advice on often vexing financial situations. And the belief is that the increase in volume, and in trust, will result in more opportunities for DE Capital to provide mortgages in the long run.

“The closest analogy,” Mr. Whitall explained, “is that it’s a service similar to what’s provided by Consumer Reports. You provide someone with information prior to the sales event, give them information on a big-ticket thing they’ll live with for a while. They’re not going in naked.”

He sees the job as a client’s advocate, rather than a service provider—and believes, in the long run, the service will prove beneficial enough to justify a long-term relationship with Douglas Elliman. “The integrity of it totally depends on it not being a sales opportunity,” he stressed, acknowledging that the test run of Mortgage Navigator is a risk for him personally the most. “As soon as there’s a hint of an angle or that you’re pushing something, it’s undermined.”

Mortgage Navigator will be the subject of a soft sell: Information will be posted at Douglas Elliman’s offices in East Hampton, Southampton, Bridgehampton, Sag Harbor and Montauk.

The new program builds on another groundbreaking move: In 2009, the real estate firm, then Prudential Douglas Elliman Real Estate, partnered with Wells Fargo Ventures LLC to create DE Capital Mortgage LLC, a mortgage company under the umbrella of Douglas Elliman. Company officials said other regional real estate companies had affiliations with mortgage providers, but the firm was the first to add an actual mortgage provider, a chartered bank, to its list of services.

Last year, Wells Fargo withdrew from a total of eight such joint ventures, including DE Capital. Nevertheless, DE Capital will continue writing mortgages, through both its own banking entity and others.

Similarly, Mortgage Navigator is believed to be a first in the region.

“What we have is the ability to sell and lease, to finance sales, and also to do titles. It’s a trifecta-type situation,” said Anthony Berti, a vice president of DE Capital, of the “team” aspect of Douglas Elliman’s various corporate entities. The result is a more seamless process, he said, allowing a buyer to deal with a coordinated group of professionals.

The result will be beneficial for buyers, he said, but also for agents, in that it will lead to quicker closings that both will applaud.

Despite the relationship, Mr. Berti pointed out, there are very clear walls between the two arms of Douglas Elliman, designed to both follow federal law and to protect the client. For instance, no personal information will be shared between the mortgage arm and the agents—a major concern for many buyers.

Mr. Whitall said he’s confident that referrals and follow-ups will result once Mortgage Navigator has a chance to plant seeds among Douglas Elliman clients. “My experience has been that, by telling the client exactly what is going on behind the curtain, it’s always been a good decision,” he said.