Become an expert . . . and LISTING Agent's new best friend!!
Yes, that’s right. I said LISTING Agent in the title! For years the mantra for most originators has been to seek out Realtors who work primarily with buyers. The reasoning behind this is obvious. Buyers need mortgages and are looking to purchase a home – easy!
As the market starts to contract and loan officers seek other opportunities for revenue – I truly believe one of the untapped gems will be listing agents. Here are a few reasons:
1. If someone is selling their home, there is a good chance they will be buying another one. Sellers often become buyers. Opportunity for business!!
2. A good listing agent will get sign calls and leads from their listings. If you develop a strong relationship with these agents you can work as a team to turn that listing into a lead factory. Opportunity for more business!!
3. By helping to support the marketing of a property – open houses, financing flyers, etc. you are developing a bond and proving useful to the Realtor and showing them that you are interested in THEIR income. That means a lot to the right partners. Opportunity for more business!!
4. Listings give you the opportunity to market creative financing options and programs. Even if a buyer doesn’t make an offer on that property you should have marketing materials at each listing. Some will take that home and some will call you. Opportunity for more business!!
5. Ladies and Gentlemen – although I am listing this one last, I have found this to be THE single most profitable reason to work closely with Listing Agents in the current market . . .
Over the past 3 months I have gotten 6 applications from Listing Agents because the mortgage company that was providing the financing did not do their job correctly and the LOANS WERE DECLINED!!!!
I work hard to let the Realtors in my area know that I am an expert in the field. I am thorough and I try to stay on top of all of the regulatory and guideline changes. Most importantly, I communicate industry changes to the agents. They know that I know what I’m doing.
In 5 of the 6 examples above, I was able to get the loans approved and closed (or I am scrambling to do so by year’s end as we speak). One of them was a gonner. Very poor upfront application process by the original loan officer and a VERY large car payment that needed to be sold in order for the borrowers to qualify. Why that was never communicated to anyone is a mystery to me. The sellers, the agents, title company, etc. etc. were all moving forward under the idea that the clients were approved and no one knew that the lynch pin of their approval wasn’t even disclosed. Since they were unable to sell their car the deal fell through. (P.S. I really tried with this one and worked for a week to see if I could find a car dealer that would buy the car from them but no one was interested).
A few key points for anyone looking to swoop in and save the day:
a. Make sure you know what you’re doing! It does no good to market to this type of emergency client if you aren’t able to articulate and quickly dissect the reasons that a loan did not go through. Being able to identify the issues quickly will help you and the agents avoid a lot of wasted time if there is no hope of a loan going through for obvious reasons. Prolonging the agony does no good for anyone.
b. Make sure that you set up a system to deal with these last minute rushes. Is your processing and underwriting in place for quick turnarounds? If you want to be known as the ‘go-to’ loan officer for these types of clients then you have to have great communication with your support staff. The secret is to get the rest of your loans submitted and approved well in advance of closing dates. If you claim to have a ‘rush’ on every file you will be known as the LO that cries wolf and you won’t get the attention you need when you need it. Become known as the loan officer whose files are a pleasure to work with – then you’ll get the special favors when needed.
c. Be thorough and quick. Typically a borrower that loses a house in this situation is desperate to get approved and there is a short window of opportunity where you will get extreme cooperation. You need to take advantage of that. Meet with them right away, have them bring all of their documents (they have them from their recent application anyway!) like paystubs, W-2s, etc. Get all of the facts from them about the reason for decline of the loan with the other mortgage company. Get as much information as you can as quickly as you can. Don’t assume anything – the loan was declined for a reason. Your job is to find out why and to see if there is another, legitimate way to make it work. You should be able to tell if there is hope of getting a loan approved early and then get to work!
d. Set correct expectations. With the new disclosure laws a 3 days turnaround just isn’t realistic. Frankly, getting a loan done in 8 days takes a mini-miracle so set the expectations upfront that this may take a while. Under promise and over perform. Please never, ever, ever say that something is ‘guranteed’ or ‘100%’ (ever, but especially in situations like this). Everyone’s stress level is super high in these situations so trying to calm nerves by over promising can often backfire and no one truly believes those guarantees anyway. I start with a 50/50 shot and move up to 99% slowly – I change my message delivery from ‘not sure’ to ‘optimistic’ to ‘extremely comfortable but we need to see what else the underwriter may call for’. People appreciate the honesty and you are doing much more for them in the long run.
e. Hone your communication skills. I often find that I am able to speak with the loan officer or processor at the company that declined the loan. They are usually upset initially and willing to help. That starts to diminish over a few days so get that assistance while you can. Get permission from the buyers to get copies of the loan package if you can. I always try to call the loan officer and, without blame or finger pointing I simply explain that I’m trying to help and I was hoping he/she could as well. I have been surprised at the cooperation once they realize I’m not calling to yell at them.
f. Be fair!!! I strive to provide the same rate and fee structure that a borrower has with their previous mortgage company. I know I am doing a lot more work and I could charge a premium for this type of effort but I feel that the borrowers are going through enough. If rates go up then there is nothing I can do but I strive to keep things as close to their original expectations as possible. Incidentally – this is a great bragging point to both Realtors in the transaction as they are very appreciative that it helps ease the transaction along.
g. Be honest, creative and honest!! When I try to put these loans together, I am never, ever trying to manipulate documents, white anything out or do ANYTHING inappropriate. I just know the guidelines and I work hard to figure out how to legitimately make a loan work. I’m often surprised that some loan officers give up so easily when a simple tweak could make the difference between their buyer getting a home or not. If it can’t work then it shouldn’t. If there is a way to help a borrower buy a home within the guidelines and law then they deserve to have that opportunity. I just work harder at doing the right things right!
These are not the easiest loans to get done but the rewards are significant. You make customers for life with the borrowers. You are truly helping people (remember when we all thought that was the most important part of our jobs?) a LOT of people. Hopefully this will help you build and strengthen Realtor relationships and meet new Agents for future business. I’ve even had Loan Officers call me for assistance because they had a loan declined and know that I can get these things done.
There is no doubt that the stress level in these situations is high. This process is not for the faint of heart. They take a lot more work than your average loan and they tax your staff. However, it is very rewarding to help people and that makes a lot of the stress melt away. Plus, I just view all of that work and stress as a marketing investment. You will never believe how supportive your Listing Agent partners become when you work that hard for their buyers and their income. Opportunity for more business!!
Now go help some people!!
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