Royal Bank of Canada  is offering real estate agents $1,000 for referring five first-time home buyers, as competition among banks for first-time buyers has heated up.

“If you think about the context of the broad market, and slowing mortgage growth, understanding where there are pockets of opportunity is really important for our business,” says Erica Nielsen, vice-president of home equity financing at RBC. “The first-time home buyer is an opportunity for us.”

Their mortgages can be more lucrative than those of homeowners who have been paying theirs down, and, importantly, banks hope to lock in borrowers early and keep them as customers for life.

So why the realtor promotion? “Because (first-time buyers) have never been through the process, they turn to the folks that they would trust and know best, like friends and family … the real estate agents play a role in that decision, and so we feel that’s an important place for us to participate."

The current $1,000 promotion runs from May 1 to Sept 30.
 

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