Remember that friend you had in college who would ask to borrow your car but never filled it up with gas and constantly made you late to class? Every-one has a friend like that. At some point, you just have to stop lending him your car.
Realtors today are often put in frustrating situations when working with lenders. Mortgage originators should listen to the stories of their referral partners, recognize their frustrations and work to ensure that their partnerships with Realtors are as mutually beneficial as possible. After all, no one wants to be a bad friend, and no originator wants to be a bad referral partner.
When lenders, insurance brokerages and other third parties consistently underperform in their ability to maintain working relationships with homebuyers, it can hurt the trust that Realtors work so hard to build. One bad phone call or one late email from a lender is all it takes to wipe out countless hours spent building goodwill with a client.
A Realtor’s trust issues are well earned. Get burned enough times and, at some point, you stop playing with fire altogether.
Rethinking partnerships
The hypercompetitive real estate market has transformed what should be a symbiotic relationship between Realtor and lender into a parasitic one. Balance in such a relationship won’t be achieved by simply cozying up to potential partners. It’ll only be achieved when lenders stop thinking of homebuyers as products — and Realtors as their purveyors — and start delivering exceptional value through service and experience.
Realtors are constantly searching for ways to add value to their client relationships. They’re investing in new technologies, becoming more active on social media, delivering personalized content, perfecting their listings and establishing unique value propositions. Increasingly, they’re relying on the combination of great service and community focus to attract clients, but they often can’t rely on their partners to do the same.
It’s largely a symptom of the way the home-purchase process works. A homebuyer has to engage with half a dozen parties before they ever get through their new front door. There’s no standard of service across each step. Frequency and method of communication to the homebuyer differ depending on with whom they interact. The buyer’s preferences may not be effectively established across all parties.
It’s a recipe for a prolonged, painstaking process that could be solved if the Realtor, lender, insurer, appraiser, title issuer and inspector have preexisting relationships. But the Realtor’s reputation is on the line, and anything less than absolute trust in a partner is enough to prevent them from making a referral.
Building or restoring this trust doesn’t have to be complicated. It just takes an investment in the same things in which Realtors have already invested.
Relationship building
A great Realtor can see behind a nice façade to find out if a home is worth the asking price or if it is just a money pit. Insincerity from a lending partner is just as noticeable — and just as dangerous — as a cracked foundation.
Personality fit is perhaps the biggest factor in forming a successful partnership. A common background or mutual connections can help get a relationship off the ground. But there are people who built their mortgage business after moving across the country and starting with no connections in their new city, so commonalities and mutual connections aren’t everything.
What won’t convince Realtors to work with you are vanilla marketing emails or cold email introductions. Cold calling, visiting a Realtor’s office, going out to lunch or hosting a work session are better options for building a mutually beneficial partnership. But if your only goal from these meetings is to convince a Realtor that you’re likable, you’re behind the eight ball. Likability is important (we’re in a service business, after all), but it only creates a surface-layer connection.
To build a truly strong partnership, it’s imperative that you dive deeper than your baseline interpersonal connection and make sure you have compatible business personalities. When you get the Realtor on the phone or in a meeting for the first time, it’s fine to ask them about their favorite sports team, restaurant or vacation spot. But you should quickly transition to asking the hard-hitting questions that will build the foundation of a lasting and mutually beneficial partnership.
When looking to forge a new Realtor relationship, there are many business-compatibility questions to consider. For example, does your approach to client experience match theirs? Do you offer the range of loan types and services to match the Realtor’s needs? You also should come with answers prepared for the Realtor’s potential questions. Know which value-added services you can provide on top of what they already deliver, and know the role you play in your local community. These are important benefits that a Realtor can emphasize to a client to win more business for both of you.
One of the most important discussions you can have with a Realtor is about consistency with clients. As industry partners, you should work together to construct a continuous model of service that makes a client’s interactions across organizations as seamless as possible. Being a Realtor’s friend is nice, but being a partner that allows a Realtor to grow their business and turn their clients into raving fans is immeasurably better.
Client-centric strategies
Having a strong mutual understanding of business philosophies and operating principles allows for a strong and seamless workflow. Before activating a partnership, lenders and originators can work with Realtors to identify the tools they use to market to, communicate with and request information from their clients. Integrating these tools with the lender’s existing systems will create a sense of continuity many clients desire in the homebuying process.
A well-built lender-Realtor relationship will build out all the critical elements that turn a good client experience into a great one. This includes the frequency and method of communication, standard response times, personalized service and easy access to digital tools that are delivered effectively to each homebuyer.
If, for example, a Realtor partner is finding traction by sending personalized video messages to a specific client — a tool that provides relatively low lift with high potential returns — the loan officer or broker should adopt a similar strategy to meet the Realtor’s client in the manner and method they’re most comfortable with.
Co-marketing is one well-known aspect of the lender-Realtor relationship. Co-marketing efforts, however, can turn a friendly relationship into a sour one if lenders walk into it assuming that spending money will guarantee them deal flow. That’s absolutely not the case. Many Realtors spend money without a core strategy or a way to convert the leads they generate.
It’s imperative that lenders conduct proper due diligence when entering co-marketing relationships so that they have a customized plan to generate business. When real estate and mortgage professionals without shared values enter this kind of relationship, any perceived failure in lead generation from the co-marketing expenses can lead to rocky relations, the potential dissolution of the partnership and no more referrals.
Both parties must agree on underlying operating principles, such as how to communicate with leads, which ZIP codes to target and how much each party is willing to spend. This creates the foundational structure to ensure good client service, which is a success even in the face of uneven outcomes on closed transactions.
Nobody can guarantee a successful campaign, but with a solid business relationship and aligned expectations, an unsuccessful campaign will not become an unsuccessful partnership. The importance of building strong lender-Realtor relationships drives at the heart of what they should have been doing all along: putting the homebuyer at the center of the deal. ●
