As we enter 2018, mortgage originators and their Realtor partners are facing a dramatic shift in the nature of the lending business.
Homebuyers and home sellers are now turning in ever greater numbers to the internet to search for both mortgage and real estate services. Consequently, mortgage professionals, including originators, need to find ways to remain highly relevant in this new digital world.
How originators accomplish this paradigm shift in thinking will determine a lot of their success, or lack thereof, in 2018 and beyond. In that light, it makes sense to take a hard look at some of the strategies originators can use to stay ahead of the curve in an evolving lending landscape.
Cultivating trust
With respect to purchase-loan transactions, mortgage originators should never forget a crucial component to their success: the professional Realtor. The influence the Realtor has on the decisions borrowers may make has always been a factor that should never be minimized.
Yet, in today’s fast-paced world, many lenders that deal directly with the consumer via their marketing and sales approach ignore the Realtor. That may be why there seems to be a widening gap of distrust between these two key players in the home-purchase world.
The trust buyers place in their Realtors should not be overlooked. With their commissions on the line, Realtors are going to discuss with homebuyers their thoughts on which originators they are comfortable with or offer local financing solutions they are more familiar with. Therefore, the digital lender that may not be geographically close to where a purchase transaction occurs may find itself at a potential disadvantage because it lacks familiarity and local proximity.
To establish that level of confidence, along with taking your first steps to build the trust that is so important on a purchase transaction, mortgage originators need to fully embrace Realtors and get them involved as soon as possible to cement a connection and secure the mortgage application.
Getting permission
One of the most important steps for an originator is to create an early engagement with the Realtor after interacting with a potential borrower. On a purchase transaction, it is key to have the Realtor become a partner or ally versus a deterrent or enemy. Therefore, during phone conversations with prospective borrowers, the minute you uncover they are serious about buying a home, find out what phase of the transaction they are in.
Is the borrower in the early investigation or looking phase, where a possible prequalification or a pre-approval could be an asset? If the purchase is not imminent, it is still critical to get the borrower to make some form of commitment to you. After that part of the process is secure, now you can suggest a quality Realtor whom you know or have worked with in the past as a possible reference for the borrower.
After getting permission, pass the prospective borrower’s name on to that Realtor. That will establish trust with the real estate agent, because you are giving them business and a commission-earnings opportunity.
Establishing the connection
If the prospective borrower is in the process of making an offer on a property, you need to kick it into high gear. When you hear the words from the borrower, “I am looking into financing to buy a home,” you should immediately ask if the individual has found a property and, if so, when an offer is going to be made. If it is soon, it’s likely the borrower is already working with a Realtor.
“ Despite all of the new technology, a home purchase is still an emotional transaction, and people are involved. ”
Confirm that the prospective borrower is working with a real estate agent and find out that agent’s name and agency. From there, you can search for the Realtor’s phone number and contact information online. If the borrower asks why you want that information, simply state, “Our company believes that a complete real estate transaction is based on the loan originator and Realtor working well together.”
Here is the key part in a successful call with a prospective borrower: Make sure by the end of the call that you get the borrower’s permission to contact the Realtor. Why? Because you can use that permission to your advantage when you reach out to the Realtor.
In selling, there is a key fact we must acknowledge. The first to the game usually wins the game. When you reach out to the Realtor after your call with a prospective borrower, you must set the professional expectation of service support that the agent will need to close the transaction.
By establishing a communication process with that Realtor, the agent can better see why the prospective borrower reached out to you as a mortgage originator in the first place, even though the Realtor may not know what you or your company offer. By letting the Realtor know you are engaged with the prospective borrower, you set the precedent that all other lenders in the local community will be judged against.
In any sale, the later you get to the customer, the harder it is to win. When you establish how you do business, the following originators need to sell themselves and their company while also “un-selling” what you already established. The complexity of the sale increases the later you get to the customer, whether that customer is the borrower or a Realtor.
Embracing the basics
As we enter 2018, the digital lending landscape is exploding, and mortgage originators need to embrace the change if they hope to move forward. Yet, if they lose track of the basics, such as the critical role that Realtors play in a homebuying transaction, originators will miss a major opportunity to make the sale easier.
Despite all of the new technology, a home purchase is still an emotional transaction, and people are involved. Never lose track of that. In that equation, the Realtor can be instrumental to an originator’s success with a prospective borrower, particularly when that would-be borrower is at a crossroads with respect to the steps ahead.
With loan pricing being very comparable today, how does a borrower make a decision? Do they go with an originator who has a good price or do they sign with an originator who has a similar price, but also has the backing of the Realtor?
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The role of the Realtor should not diminish one bit as we move into the year ahead. Instead, it should grow in your focus as a mortgage originator, providing a path to truly differentiate yourself in the market. With that solid connection, and your ability to embrace the Realtor as a trusted business partner, you can be a major success in this new digital-lending world.
