Qualified leads are never easy to find, particularly in today’s market. Traditionally, mortgage companies have schlepped around to local real estate companies soliciting business with stacks of contact cards, free embossed pens and the hope that at some point, the firm’s real estate agents will refer a client or two their way. This approach worked during the boom times and before the credit crunch, when there was enough business to go around for everyone.
The same doesn’t hold true today, where lenders are vying for a smaller slice of the pie. There are fewer buyers in the market today, and even less individuals who qualify for conventional loans under current standards. At the same time, more real estate brokers have gotten into the mortgage business—a phenomenon that’s taken even more deals off of the mortgage companies’ plates.
I connect with a lot of mortgage professionals in my line of work. Some of them have already bought into the idea of running a real estate company, but they’ve gone about it in a high-rent, high-overhead manner. One option, for example, finds the mortgage company paying a desk fee to a local real estate broker for a period of time.
The mortgage firm placed licensed agents in the broker’s office, and benefitted from the ancillary business afforded by the arrangement. But what happened when another mortgage firm came along and offered a higher premium for that desk space? Yes, you guessed it—the original lender was kicked out and replaced.
Purchase lead systems that work
Mortgage firms are finding new lead generation avenues through “purchase lead systems” developed especially with the loan officer and for sale by owner (FSBO) consumer in mind. The approach works like this: loan officers use the Internet (through a site like www.homesadvisor.com) to promote the home listing. That FSBO is the “lead” (because he or she is buying a new home), and is cultivated through the online marketing (plus a “seller kit” that includes forms, registration sheets and flyers) and sale of the property.
The national property listing website that the loan offer uses is linked to more than 1,000 real estate websites, thus allowing the FSBO the opportunity to advertise to millions of potential buyers via the Internet.
To further increase exposure, the home is also listed on other high-traffic sites such as Zillow and Google Base, along with local MLS listings in most areas. This is exactly the type of exposure that FSBOs are looking for, and your participation in the process means that you are not only the lender of choice for the seller (who is going to be purchasing a new home), but also the buyer (who will be directed to you for pre-approval).
Brett Lopes, president at Intercounty Mortgage Network, a Hazlet, N.J.-based mortgage banking company that specializes in resident financing, is a proponent of FSBO purchase lead systems. “In this challenging financial and credit environment, FSBOs need all of the help they can get, particularly because they’re not working directly with real estate agents,” said Lopes. “By marketing those sellers’ homes, and by connecting them—and their buyers—with financing, we’re fulfilling a real need in the industry.”
The benefits run both ways, according to Lopes, whose firm has opened up a new customer pipeline by working directly with FSBOs and providing them not only with marketing and advertising tools, but also pre-approvals and loans for their next homes. “This opens up the entire marketplace of consumers who are searching for homes,” said Lopes. “All of these buyers—regardless of which home they eventually select—are going to need financing at some point.”
The lines are blurring
There was a time when mortgage lending and real estate sales operated on completely different axes, with one arm handling the financing associated with a home purchase and the other serving as a trusted advisor for the homeowners. “Never the twain shall meet,” was the name of the game as both entities went about their own business, coming together only in the early stages of the financing process, and then again at the closing table.
Times have changed. Even before the challenging economy surfaced a few years ago, mortgage business models were starting to morph and include diversified offerings that went beyond traditional financing. Ancillary business lines like life insurance and title services, for example, have grown in popularity as mortgage lenders and brokers strive to develop their companies through non-traditional means.
Up until now, very few lenders have considered real estate sales as a viable business service to add to their lineups. Now, with over 90 percent of homebuyers starting their home searches on the Internet, the opportunity lies firmly within the mortgage firm’s grasp. By using one or more of the many technology tools that are at your fingertips, you can expand your mortgage business by assisting homeowners with the advertising and marketing of their properties.
Going direct
Right now, a lot of your competitors have their eyes on the refinance market. They know that the purchase market isn’t hot, so they’ve taken their focus off of it and instead put their energy into other avenues. That leaves a perfect opportunity for the enterprising mortgage firm that wants to take proactive steps in finding new, highly qualified leads.
The FSBO market is ripe for the picking, and full of eager sellers who—in their quest to avoid paying real estate sales commissions—have taken on a monumental task that you are well equipped to help with.
With the financial markets continuing to evolve, now is the time for mortgage firms to take proactive steps to find new, qualified leads in the most effortless manner possible. Using the Internet and proven marketing channels, you’ll be able to exploit this niche and beef up your business with very little time or money investment.
A licensed real estate broker and mortgage broker in multiple states, Larry Vecchio is president of Better Homes Realty, in Hazlet, N.J. With 22 offices and 500 sales associates, Vecchio’s firm posts sales in excess of $100 million annually, and is the purveyor of over 1,200 Web sites, including HomesinYourTown.com and BetterHomesUSA.com. Well versed in the real estate industry and the front-seat role that technology has taken in a field he’s been active in since 1981, Vecchio has his finger on the pulse of the evolving real estate industry.
