Here’s a line slung around a lot in the past year: “These are unprecedented times.” But it’s absolutely true in the sense that the mortgage industry is facing the biggest housing inventory shortage in decades.
In the past, there have been areas of the country with low inventory, but it’s everywhere right now. There are literally more Realtors than houses for sale at the moment. No one has seen anything like it. As a mortgage originator, you probably have a ton of preapprovals for buyers who can’t find properties. Sellers are receiving 10 to 15 offers on their homes. This is not only a problem for buyers — it’s a problem for lenders and real estate agents as well.
You’re likely getting calls about the same borrower over and over again: “Hey, I need a preapproval letter and I need it now.” Your referral partners, the real estate agents, are jumping in the car at all hours to show properties. An offer doesn’t get accepted because it’s one of 10, and the buyer and the agent have to start all over again. What used to be fairly straightforward has turned into a whole lot of extra work.
Across the mortgage and housing industries, everyone’s biggest concern seems to be this issue of low inventory, countless preapproval letters and multiple offers. Mark Day, president of Remarkable Home Loans, came up with an amazing list of things that mortgage originators can do to get their clients’ offers accepted.
He shared these ideas at Freedom Club, a group of about 500 originators, branch managers and mortgage company owners who meet online once a week (and in person less frequently) to share ideas and strategies about how to grow without working more hours. Many of these folks implemented some of these ideas and they’ve reported a major uptick in accepted offers.
These also are great tools to attract Realtors as referral partners. Tell them that you have some great ways to help them get their buyers’ offers accepted. You don’t have to do all of these. Pick the ones that fit best, do as many as you can and run each tip past your compliance department just to be safe.
Do not underestimate the importance of picking up your phone and making a personal connection. Call the listing agent to tell them you’re sending over the offer letter. Tell them what else is coming with it. Ask them to call you back if they have any questions.
While you’re at it, send a video, too. Don’t worry about overkill. You can’t send over too much information. Tell them who you are and the company you’re with, and mention your clients and the real estate agent who is working with them. Tell the listing agent your clients are getting ready to make an offer on the property. You’ve pored over the 15-point preapproval checklist and they’re good to go. Say something like, “If I was selling my house, I would absolutely want to sell it to buyers like them.”
Calling someone is always a great idea. Tell the agent what they want to hear, so your offer will be the one that’s accepted. Show them you’re a nice person, you know what you’re doing, and that you’re going above and beyond. You’re going to send over an entire offer package that sets you apart from your competitors.
Hopefully, you already have reviews on hand somewhere (Google, Facebook, Yelp) from happy clients. Pull your three favorites and send these along with the offer. If you don’t have any, get them. Call up past clients and ask them to leave a review or shoot you one via email. As a mortgage originator, you want reviews that say you’re great and you close on time — no surprises.
Finally, highly recommend to the buyer’s agent that they do the same thing. Have them collect reviews from other Realtors saying how nice they are and how easy they are to work with. Believe it or not, other originators aren’t doing this. It will set you apart.
One of the coolest things you can do is to send over a letter from the buyer making the offer. “Hi, I’m Sue Smith. My husband and I (and our 2.3 kids) would love to live in your home. The tree in the front yard would be perfect for a swing for Jimmy and Susie. We’re so excited that this house is zoned for South High School. We heard they have an incredible marching band and Susie has her heart set on playing trumpet in the band.”
People usually have an emotional attachment to the house they’re selling. They either raised their kids there or it was the place they started out as a couple. When people sell a house, they want other people to love it, too. Paint a picture of the new owner in the house and carrying on this tradition of warm, fuzzy, emotional experiences. It sounds corny, but it works.
Do more than bring emotion. Offer a close-on-time guarantee. This is where you put your money where your mouth is. Offer to pay $500 toward the buyer’s closing costs if you don’t close on time. Now, you can’t give this offer to the listing agent or the seller, but it still affects them.
You say, “Ms. Selling Agent, I’m going to write a big check to my buyer if we don’t close when I say we will.” This serves as tangible proof that you’ve got skin in the game, that you’re absolutely committed to closing on time and you’ll do everything in your power to make it happen.
Let’s say the seller closes on their house, then something happens with the closing of the house they’re buying. They’re left in limbo. What are they going to do for the next two weeks? One thing to do to increase the chance of your offer being accepted is to ask the seller, “Do you need a little extra time?”
Make sure it’s compliant, of course. Never do anything against underwriting guidelines. Offer the seller two weeks to stay in the house to make sure their new house is ready. Let them stay there for free. It doesn’t cost the buyer much and it’s a great concession for the seller.
Tell the listing agent and the seller about your preapproval checklist. Make it long and make it look good. Include 12, 15, 20 different items. This is all standard stuff — W-2 forms, verification of employment, a large deposit in their bank account, etc.
This shows that you didn’t just do a quick preapproval while you were driving down the road. You were thorough. You covered all the bases and then some. You’re going into much more detail than other potential buyers. This will give you a leg up.
Another thing to do is to position yourself as an expert on whatever kind of deal this is. Tell the listing agent and the seller about your expertise. Let’s say it’s a condominium. Your expertise is lending on condos. Don’t be afraid to say you specialize in certain types of financing, such as government loans. You can specialize in all kinds of loans. Many originators do, but they don’t think to say it.
Let them know you’ve actually done to-be-determined underwriting, if you have. Let them know the difference between preapproval and prequalification. Say that the buyer has already been approved and all that needs to be done is to approve the property. Let them know the depth of your preapproval. Include this information in both the phone call and video. You’re going the extra mile here.
Something else you should do is to ask the seller what they want. When you’re on the call with the listing agent and getting to know them a little better, say something like this: “Realtor Valerie, what does the seller really want here? What are they looking for in a buyer?”
Then be quiet and listen to what they’ve got to say. Maybe they want the home to go to someone who will appreciate it. Or maybe they need someone who will offer them 10 extra days in the house after closing. Whatever it is, as long as it’s legal, ethical and moral, try to make it happen.
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Now is not the time to lay low or hold back. Put it all on the line. Give it everything you’ve got. Unicorns, confetti, candy hearts — whatever will make your buyer’s offer stand out from the crowd. You’ve heard the line, “Go big or go home.” Go big, so your clients can go home — their new home. ●