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   ARTICLE   |   From Scotsman Guide Residential Edition   |   December 2012

Bring More to the Table Than Food

True partnerships with Realtors require more than token efforts

Mortgage brokers and real estate agents have the same targets — people who want to buy homes — so partnerships between the two are logical and often highly profitable. Many brokers simply want to show up with food at an open house and reap the rewards of a Realtor’s clientele, however, and that is not the basis of a true partnership.

In a true partnership, each participant reaps tangible benefits, and at best, bringing food to an open house is a token gesture. Originators often think it’s a way to show support to real estate agents and also perhaps a way to spend quality time with them, but those food dollars may be better spent elsewhere. Start by looking at your goals. These should be the same for both sides: You all want the home purchase to go smoothly, and the homebuyer’s loan to close efficiently and with as little trouble as possible. So, how do you best work together to get there?

There are many ways in which brokers and originators can partner with Realtors that create a long and fruitful relationship for all involved. Here are a few ideas to consider.

Marketing

It makes sense for brokers and Realtors to partner when it comes to marketing. By marketing together, you show potential clients that you have a total solution for the homebuying process. Many Realtors and mortgage brokers do partner in marketing, but historically, it’s been a hit-or-miss approach whereby a real estate agent may ask a mortgage broker to pay for an advertisement in exchange for having the broker’s logo on an ad or beauty sheet. Although this is a good initial step, there are tangible benefits to partnering on a more consistent basis and with a plan. Because advertising draws its effectiveness from frequency, it would make sense to find venues where co-branding makes sense and benefits the team.

For example, you could co-brand in print ads, on Facebook with a professional business page that touts the benefits of working with a mortgage originator and real estate agent team, or you could sponsor events together, such as first-time homebuyer or “trade-up” seminars. Consider sitting down with your real estate agent partners and planning a marketing strategy for the year, complete with a budget and measurable objectives. That’s a true partnership.

Pre-approval letters

Another aspect of lending with which Realtors would like help is pre-approval letters. Collaborate to get a potential buyer a real pre-approval letter. Sometimes it seems as though there are lending companies out there that offer pre-approvals to anyone with a pulse. Help your Realtor partner get a true pre-approval letter — one that will stand the test of time and offers. If there’s a buyer who takes several months, or even years, to find the perfect dream home, work together to assure that the numbers in the letter stay current. If you can make potential buyers more comfortable, they are likely to remember you when it comes time to seal the deal.

"It makes sense for brokers and Realtors to partner when it comes to marketing. By marketing together, you show potential clients that you have a total solution for the homebuying process."

It’s also important that you work together to inform the buyer about what the pre-approval means. Helping them to be confident in stepping out on the pavement, knowing what they can offer and knowing that the money will be there at closing goes a long way toward making buyers more comfortable — ultimately making your job easier. A confident buyer is more likely to make a quick offer knowing that the money is essentially in hand. One of the biggest advantages to an accurate pre-approval letter is the confidence it builds in a buyer.

Education

Realtors don’t have the vast knowledge of mortgages and lending that mortgage brokers and originators have, so sharing that knowledge with potential buyers is a terrific collaboration. Help Realtors to educate buyers on what credit scores mean and what a lender is looking for — this information is especially helpful when you have to ask homebuyers for 30 pieces of their most personal documents. Instead of bringing cookies to the next open house, consider setting up a table in the kitchen and helping potential buyers to establish a basic understanding of the process. No lectures needed — just be available to answer questions.

Realtors know that buyers respond to mortgage brokers who are there when they are needed. In the course of a house hunt, a buyer may make as many as 20 offers or as few as five. Things change in that time. Originators have a chance to shine by sharing changes in interest rates, potential new financing strategies and other lending pieces of the puzzle along the way. Explaining the intangibles that go along with a mortgage also would help buyers. For example, things will change if there is a condo fee involved. Taxes also add a new dimension, as do fluctuating purchase prices.

Buyers want to understand the different aspects of the process. They want to know where the money will come from at closing, and they must understand the importance of preparing for as many money contingencies as possible. That way, if the offer fluctuates, they can ride the tide and not panic. Knowing the purchasing power they possess will go a long way toward heightening the needed confidence that will bring a buyer closer to a close.

Communication

Once a client actually enters into a contract, an engaged mortgage originator should be in communication with the many people involved. Everyone from the buyer to the seller to the appraiser and the escrow company are asking the Realtor where things are at, so be sure to help your partner and deliver this information in a timely and thorough fashion.

Getting a home to contract is hard enough, but now you and your Realtor partner actually need to close the loan. Here again, you have a common goal: You want to seal the deal and go out for dinner. Educating the buyer on what the lender is looking for — again — is often the first step. You’ve been through it before, but the emotional turmoil involved in paying such significant sums of money for a house tends to make people forgetful. Staying abreast of the potential downfalls on the part of the buyer and seller is the Realtor’s job, but keeping track of missing paperwork, changing rates and different financing options is yours. Together, buyers have everything they need, including a great team.

Teamwork

Think of the possibilities of creating a true partnership with Realtors. They have a vast understanding of selling and buying a home, but they also understand that without financing, they would probably be out of business. Likewise, the vast array of mortgage products is enough to make most people’s heads spin. Mortgage originators know how to speak to the average borrower in lending terms they understand.

You also know the solutions to often- encountered problems and the best mix of financial vehicles on a case-by-case basis. Realtors have what you want — a potential mortgagor — and you have what they want: funds. Together, you can create campaigns that allow for one-stop shopping.

Don’t misunderstand the message here: Realtors often love it when you turn up at an open house with cookies, cakes and punch, but think about how much more helpful it would be to buyers and to Realtors if you turned up with brain food. Not fish and carrots, but rather brochures with understandable definitions of mortgage terms, a daily Facebook post defining a mortgage term or simply a one-on-one conversation with the young couple with the new baby who are moving away from their hometown for the first time and have absolutely no idea where to begin. Realtors can help them find their way around the neighborhood, and you can help them navigate their finances.

Two minds are better than one, and by entering into a true partnership with Realtors, you both can reap the rewards of the relationship.


 


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