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Digital Modernization Or Free Lunches?

Real estate agents are ready for more from mortgage lenders

Joe Welu
Insider
Joe Welu
Free Lunches

If nothing else, 2022 has shown that a tumultuous and uncertain housing market is here to stay for the foreseeable future. Homebuyers are working with their teams to navigate rising interest rates, fluctuating housing prices, and limited overall housing inventory. This year, sales started strong, but the second half of the year proved that mortgage lenders will have their work cut out for them in 2023.

Despite industry woes, it’s expected that consumers will continue to purchase new homes. However, many will be doing so with increased reliance on financial partners and real estate agents for strategic guidance and counsel throughout the process.

For decades, mortgage lenders or loan officers have worked closely with real estate agents — both providing a critical role in the process of getting buyers into new homes. The critical relationships between these two sides of the equation have historically been reliant on referrals and networking. As the market for mortgages continues to be increasingly tight, the traditional approach of buying lunch for the agent and leaving a mortgage rate sheet behind may no longer be the strongest strategy for lenders.

With this new market reality in mind, lenders must rethink their approach and deliver more value to their real estate partners. Since most agents commonly work with a few different lenders, they will need to prioritize the lenders that can provide them with data and insights on consumer behaviors and near-term opportunities. Networking and free lunches between lenders and agents will never go away, but it’s not enough to keep the best real estate agents on your side.

Unlocking Consumer Insights for Agents

The current housing market has created an emphasis on resilience. Strong, preapproved offers are more likely to close deals. Often when lenders are working with a buyer in the preapproval stage, they will refer them to an agent. More often than not, they already have an agent in mind. Similarly, buyers most likely already have a lender by the time they are looking at houses.

The key to working together and leveraging the strategic partnership between lender and agent is discovering buyers in the early stages of house hunting or financing. From there, lenders and agents can work collectively to guide the buyer through the process together. But how can you know when a consumer is considering purchasing a new home or engaging with a new lender or agent?

Luckily, there’s a typical homebuying process with distinct steps along the way, and modern technology is available to lenders that can illuminate these steps. By following these steps, lenders and agents can better anticipate consumer behaviors, develop proactive sales and marketing campaigns, and build strong teams that more homebuyers want to partner with.

Decoding The Signals

Consumers typically begin their homebuying journey through their own research. They start by visiting real estate and lender websites, mortgage calculators, or different financial apps to gather information and understand what they can afford, what their monthly payments might be, and what mortgage rates appear to be available to them. Long before connecting with an agent, consumers are signaling intent in the homebuying process via this research.

For lenders to capture this intent, however, they require the right technology that can monitor these behaviors and flag these signals. With these insights, lenders can tip off real estate agents to potential new leads, building a stronger base of business for both parties.

Digital Modernization

Together, lenders and agents can serve up personalized and relevant content to these potential homebuyers, guiding them into the pipeline more quickly and creating greater consumer loyalty in the process. By serving up insights on consumer intent to preferred agents, it creates greater lender value — something that the traditional free lunch simply can’t do.

Data-driven technology is also helping lenders segment customers who may be entering the homebuying process but have yet to act upon it. Using motivational data and segmentation data, lenders and agents can work together to deliver increased personalization and messages that will resonate with these audiences still in the early stages.

Simplifying Co-Marketing

Once insights on potential homebuyer behavior is shared across the lender-agent landscape, the next step is personalized co-marketing. New technology platforms that offer native co-marketing functionality enable both partners to create and distribute sales materials and collateral, including emails, print ads, and landing pages.

To many, this might seem labor-intensive to create and send unique materials to each potential lead. But today’s customer relationship management platforms can deliver automated campaigns and consistent outreach that explains the process of pre-approval, best practices on building a financial track record, and other relevant information without requiring much manual work on the part of lenders or agents.

While co-marketing is a natural extension of the relationship between real estate agents and lenders, the process can be confined by rules and regulations. Ensuring that co-marketing adheres to strict industry regulations can be complicated; however, select modern management platforms on the market today can help all parties comply with industry regulations to streamline the process, providing a safety net to both parties.

As homebuyers continue to experience today’s tumultuous housing market, it’s essential for lenders to demonstrate their value to both their customers and to real estate agents. These partnerships have existed for years, but adding additional value will benefit all parties. Shared data that drives customer growth is proving more valuable than a free lunch — and both lenders and agents are catching on to reap the rewards.

This article was originally published in the NMP Magazine December 2022 issue.
Joe Welu
Joe Welu,
Joe Welu

Joe Welu is CEO and founder of Total Expert, a fintech software company.

Published on
Nov 30, 2022
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