You know the saying: no originator is an island.
You’re often the first point of contact when a consumer wants to secure a mortgage, but there’s an entire host of people that are involved in getting that mortgage – and there are some people who are often overlooked as sources for referring new business.
Real estate agents are one of the most – if not the most – popular referral sources, especially in an environment where purchase loans are the majority of business. Some potential borrowers go straight to a realtor when starting the home search, so realtors are crucial when it comes to putting you in front of clients you may not otherwise reach. The best part of this is that you probably already know a handful of realtors. Even if you don’t know them professionally (yet), friends, relatives, co-workers, or just about everyone who’s bought a home has used a realtor and can put you in contact.
But buyer’s agents aren’t the only target. Meeting listing agents is a great way to build partnerships because, at the end of the initial mortgage cycle, they’ve been required to work with you and have a reason to trust you and see firsthand how smoothly you can make the process. Communicate with them the same way you communicate with your buyer’s agent, and you will “blow their mind,” said Mathew Schulz, president and owner of Firelight Mortgage.
“Every buyer’s agent pretty much expects that. But if you call the listing agent and give them that same update every time you call the buyer’s agent, when you are sitting at that closing table, that listing agent is going to ask for your business card,” Schulz said. “And that listing agent is going to say, if you gave me that level of service as a listing agent, I can’t imagine the level of service you’re going to give me as a buyer’s agent.”
In a primarily purchase market, builders are good referral partners because sometimes clients will begin their home search with a builder, not a real estate agent as they might typically do with a resale property. In markets across the country where resale inventory is low and new construction is on the rise, this is becoming more prevalent.
Working with builders is a little different than with realtors, as the closings can be delayed due to the construction process. You also have to check and make sure that you offer the types of products necessary to suit the consumer. The upside is that builders can erect hundreds upon hundreds of homes a year, so there’s potential to close a lot of deals.
Financial advisors are also a good source of referrals because potential borrowers will often go to a financial advisor independent of buying a home or even thinking about buying a home. In these cases, buying a home can become part of a potential borrower’s overall financial and wealth-building plan, and when they’re ready to secure a mortgage, then the financial advisor can send them your way. This is also a relationship where you can easily prove valuable to them; if you don’t provide a broader, long-term financial review as part of your service, then having a few advisors on hand can be useful. Not only will being able to hand them off to a financial advisor give them peace of mind after making such a big purchase, but it’s also a way for both you and the financial advisor to keep tabs on the client and know when their mortgage term is ending or when would be a good idea for them to do a refinance.
An added bonus is that any vetting to make sure they’re able to carry a mortgage and are being financially responsible will have already been addressed, and any kinks in a client’s credit history may have been ironed out before they get to you, making the overall process run more smoothly.
Attorneys may not be as prolific in referrals as some other referral partners, but they can often point clients in your direction when they don’t know where else to turn. John Noldan, senior vice president of mortgage lending at Guaranteed Rate in Elmhurst, Illinois, said that he gets “a ton” of clients referred to him from divorce attorneys. Unfortunately, when people split up, assets are divided and sometimes sold, which means one – if not both – parties involved needs a new place to live.
Take a hard look at your existing client database. If you’ve been in the business for a while, you have hundreds – if not thousands – of people that you can reach.
“So many people are out there busting, banging their head about the wall about real estate agents, and good agents are worth their weight in gold, but that agent that does one transaction every six months and you focus so hard to get that one transaction, ugh,” said Schulz.
“I will take my existing database anytime over a long list of real estate agents. There’s other resources out there, but . . . you’re sitting on your database. That’s free. You don’t need to take your database to lunch.”
Schulz says that pulling from your existing book of business is difficult for new originators and it does take time to build, but once you do, you benefit not only from those clients themselves, but also from their networks. “That is time well spent compared to bringing donuts to a real estate agent shop that has three agents in there and they’re all the rookies. Existing database is huge, huge, huge.”
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