How can creating relationships with new real estate agents help lenders win more business in the future?
Virtually all the conversations we’ve been having with lenders this fall and winter have been focused on empowering their strategies for winning more business next year. What will it really take to win more business this year?
Naturally, much of the conversation is focused on what the tech stack lenders are bringing to market. They are being more careful about choosing partners that will empower their strategies and not just work to drive them to a set of vendors that increase the lender’s costs.
This year it will be about agility, configurability and the ability to work with any vendor partner in the broader lending ecosystem the lender believes will help them win more business and serve more borrowers.
Of course, they still have to find borrowers to serve.
In the purchase money mortgage market lenders are competing in now, business referral partners have become critically important. As a result, we’re seeing every loan officer in the industry competing for the attention of the top agents in their local markets.
This makes sense, since forming even one strong partnership with a leading agent can keep a loan officer busy all year long. It’s the old 80/20 rule in action; get to the people who are closing the bulk of the business and you’ll have much more opportunity.
As a result, we see 80% of the nation’s loan officers actively courting 20% of the real estate agents. But the competition is fierce.
There is another strategy lenders can take that may be just as effective in the short term and possibly much more so in the long run.
Every month in small classrooms all over the country, real estate agent training firms graduate a new class of agents. The vast majority of them are unceremoniously dumped into the market to fend for themselves.
Smart lenders are watching this and then reaching out to these new agents with support. Because most new agents will only end up selling a few homes in their first year, most lenders don’t put any effort into forging these new relationships.
We’re meeting with more savvy lenders who are seeing the value in starting these relationships early, offering financing support that will make every home they list more attractive and then doing what everyone should have been doing for the last few years and nurturing that relationship.
Supporting a new real estate agent during the year or two it will take for them to fully grow into their new job could pay huge dividends in the future. Leading lenders realize this and are implementing this strategy now.
By Joe Camerieri, EVP, Sales & Strategy at Mortgage Cadence
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