by Brian Brady
Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL
I had a chance to talk to Mark Sennott, President of Home Gift, this week. Home Gift is an affinity marketer much like MBNA. MBNA started as a credit card marketing division of the old Maryland National Bank. Their model was to offer credit cards to alumni association members that were “branded” as the official card. MBNA then rebated a portion of their income to the alumni association. Joe College felt good about racking up the old debt because he was supporting State U.
It was a wildly successful idea. It was so successful that MBNA spun-off from Maryland National Bank in 1991 in a public offering.. They grew to a 12% market share of all credit card customers before being bought by Bank of America in 2005.
Enter Mark Sennott. His company offers a consumer access to a network of real estate agents and mortgage companies who are willing to “rebate” a portion of their fee to the consumer. Portions of that “rebate” are earmarked for a certain charity. Home Gift takes an administrative fee. It’s relocation company meets Redfin wrapped up in the warm and fuzzy blanket of philanthropy. Check out Mark at his web log. He’s passionate, engaging, and claims to be an avid reader of Bloodhound Blog (so he can’t be all that bad).
I found out about Home Gift some two months ago. I was trying to help a little Carmelite Monastery in Massachusetts make American Tower Company honor a contract. ATC found out that the land the monks bought for their monastery was the perfect location for a wind farm and pulled out of the sale. The monks are suing the cell tower behemoth for specific performance. I posted “Don’t Mess with My Monks” on Active Rain and was referred to Mark by the Prior of the Monastery.
Mark’s doing what so many real estate professionals deplore. He’s rebating fees to the consumer and charging a toll for access to the customer. Customers, however, like the idea. They deal with full-service real estate professionals at a discounted rate and help their favorite charity. I’m in Mark’s camp. The rebate amount isn’t oppressive and can be chalked up to “marketing costs”. Our firm filled with debt purveyors may sign on as a vendor.
Redfin may turn out to be a dominant force in the geeks with nice houses segment of the population. They may command a market share as high as 80% of the thousands of geeks with nice houses. 70% of Americans, however, give an average of $1,800 annually to charities. Let Redfin dominate their market; I’ll take 12% of the rest of it.
Mark Sennott says:
Thank you Brian. You hit the nail on the head. What we are doing is not all new. Its affinity marketing. That’s what a lot of relocation companies do, etc. The difference is two-fold. First, we are reaching out to non profits (instead of just companies) to provide agents with large groups of potential buyers and sellers. Second, we are not just pocketing the referral fee. By giving 70 percent of the referral fee away, we are making the agents look good to their customers (rebates) and faciliating charitible giving back to our non profit partners (donations).
What’s more, we are not just an “email” referral system. We actually screen all buyers and sellers before we refer them, which has brought our closing ratio to over 75 percent. Now that’s a referral fee agents can feel good about!
February 10, 2007 — 9:34 am