How lenders can build valuable relationships with agents- HousingWire
The ideal real estate agent-lender relationship is symbiotic: the agent earns the trust of their borrowers by connecting them with an excellent lending resource, while the lender receives a constant flow of business from the agent. Simple, right? Unfortunately, this dynamic deteriorates too often. Common reasons for a deteriorated relationship include unreliability, lack of communication, inability to set realistic expectations, and mismanagement of issues during the loan process.
Still, lenders are wise to cultivate relationships with real estate agents. For many, recommendations from real estate agents are essential to generate stable business through changing market cycles. And it’s not just anecdotal: Across all industries, the success of SEO activities is well documented. According to a A Hubspot study published this year:
- 92% of consumers trust referrals from people they know
- Referred customers have a 30% higher conversion rate
- Referrals represent on average 65% of a company’s new business
The evidence is compelling: if an agent refers a borrower to your loan services, they will likely trust that suggestion. Then, once the borrower hears about your offers, they will most likely become a customer. It is a powerful conversion funnel.
So what can lenders do to create consistent referrals from real estate agents in their market? To find out, I interviewed Longmont, Colorado agent Mindy Jensen on Maxwell’s Clear to Close Podcast to discuss his relationship with John, the lender who negotiates his clients’ loans. In this conversation, we looked at the specific, day-to-day habits and actions of lenders that have earned them the coveted title of “Must-Have Lender”.
Communicate, communicate, communicate
Any relationship of trust is based on good, clear communication. The agent-lender connection is no different. Proactive communication is key to impressing real estate agents and their borrowing clients.
And yet, despite the importance of this practice, most lenders fail miserably. In fact, as we covered in our recent ebook Winning agent companyWhile nearly 80% of agents say they prioritize effective communication and responsiveness over all other concerns, most calls and emails to lenders go unanswered for days or weeks. This is unacceptable at any time, but it is especially decisive in today’s hot market, where homes are selling in a record of 19 days on average.
Referring to her referral lender, Mindy said, “I could text him at 7:00 am and he’ll get back to me before 7:30 am. I had a referral lender for 11 years before I met John. He is no longer my lender of choice because he only works 9:00 a.m. to 5:00 p.m. Monday to Friday. Well, right now the properties are selling on Saturdays and Sundays.
While good communication may seem intuitive, there are a few specific steps that lenders can take to differentiate themselves from their peers:
- Provide open lines of communication. This means handing over your cell phone number, not just your office number to realtors and responding to text messages. This gives agents increased access to you and sends the message that you are willing to go above and beyond to get loans closed.
- Send updates even when there is no update. If you want to be a go-to lender in your market, it’s not enough to be responsive. Instead, communicate proactively. Pull up a quick email or text once a week, even if that’s just to say things are still going according to plan.
- Notify agents when you are unavailable. As a lender, there may be times when you feel that your work is intertwined with your personal life. As the most productive loan officer, however, that’s part of the job. If you’re out of town for a few days and an agent is waiting for checks on a certain loan, for example, let them know exactly when you will be logged out.
You won’t gain the trust of a real estate agent in a week or even a month of good communication. But practiced consistently, proactive communication will build you a reputation that will snowball into a solid reference business. Don’t think of this as one-off acts or spurts of effort meant to impress. Instead, make regular communication a habit that you practice day in and day out. Your efforts will pay off.
Sharpen your craft
As a lender, you know that most lending institutions actually charge roughly the same rates. They offer similar loan products and the outcome for most borrowers is comparable.
Since parity, where lenders can differentiate themselves the most during the mortgage process, is to close quickly, offer a smooth transaction, and simply offer great service. The best lenders take the time to learn from their mistakes, anticipate problems, and proactively tackle problems. In other words, the big lenders deliver regularly.
“Anyone can be an amazing lender,” Mindy said. “John gives me what everyone can give me. All the rates we’re getting right now are in an eighth [point] one of the other. What is $ 20 a month? It is not really a question of tariffs. If you want to partner with an agent who’s doing business all the time, you just need to be awesome.
While lending expertise comes to some extent over time, there are still ways to hone your ability to impress agents and borrowers and get to the closing table faster, with less hassle. :
- Inform your borrowers. About 20% of millennials say that they do not understand any step in buying a home. When borrowers don’t know what to expect from the loan process, they are more likely to take longer and make mistakes in providing the necessary documentation and information. By offering resources and expertise on what to expect, you will increase the chances of a smooth process and build trust with the borrower.
- Audit your processes. If you are having certain issues on a regular basis, it is time to take a look at how these issues arise. Work with your management team to take note of unnecessary blockages and touchpoints, from loan request to closing, and to think about corrective actions. By working on the business rather than the business, you’ll be able to resolve recurring issues and create a smoother process for your borrowers.
- Advocate for updated technology and tools. Ellie Mae borrower survey found that 50% of borrowers in the past five years have chosen their lender based on whether or not they have an online portal. The ability to apply online has become a tabletop issue, but beyond this functionality, technology platforms are increasingly vital to the productivity of lenders. If you find yourself lagging behind the competition because you are still doing tasks by rote, consider upgrading your technology. Digital mortgage platforms like Maxwell help loan teams streamline the lending process, wowing agents and borrowers alike by closing loans 45% faster than the industry average.
By setting expectations up front, using your resources wisely, and learning from the obstacles you have encountered, you will refine your loan process. Realtors will quickly recognize your trustworthiness and recommend you to borrowers as a sure-fire option to seamlessly take out loans.
Ask for the reference
Let’s say you’ve done all the work necessary to communicate regularly, streamline your processes, and make a name for yourself. At this point, you will begin to build a reputation for yourself among the real estate agents in your market. Here you can let your benchmark business grow organically or you can amplify your recognition in the industry.
As a credit professional, you are your own marketing team. Yes, you work as a business, but it’s your job to act as an entrepreneur and build a business that attracts and converts prospects. This is why you have to defend yourself.
If you have consistent positive interactions with an agent, take advantage of this relationship by:
- Request a testimonial to post on your social media feed
- Solicit a notice that will appear to prospects Googling your name
- Request that you be referred in future situations where a lender is needed
If you introduce yourself and provide an exceptional experience in your daily work, over time you will stand out. And if you’re good at what you do, real estate agents and borrowers will have no problem promoting your service.
“Every time I talk to a new agent, I ask them, ‘Hey, do you have a good lender? Because I have a great lender. Would you like me to introduce it to you? ‘ Mindy said.
Sometimes marketing is complicated. Other times, it’s as easy as asking a few well-connected people to pass your name on. Who knows, maybe soon you will have your own Mindy singing your praises to everyone who will listen to you.