Thrive With Realtors By Cultivating True PartnershipsApr 11, 2019
Now is one of the best time to connect with Real Estate Agents to cement current relationships and to find new quality partners that can significantly grow your business. If you want to enjoy a long term annuity income, you can strike while the iron is hot, and that time is now! Let me explain...
Great Time to Cultivate Realtor Partnerships
If you're a loan officer in the business of mortgage loan origination, this is a particularly important time to reinforce and cultivate new genuine, mutually beneficial partnerships with real estate agents. Many agents are seeing a lull in the market -- that is, a property that would previously have been a guaranteed quick sale might be listed for an extended period of time with no action.
Because they are not converting properties as quickly as they may have in the past, realtors are seeing their volume shrink, and this is a legitimate source of worry. However, a changing market brings new opportunities, and now is a great time to step up and show your agent that you have an active interest in being a valued partner and asset.
It's a great time to set up appointments with everyone who brings you referrals (or those agents that you want to work with), but you'll first want to take the time to develop a presentation based on the shifting market realities, something that makes intrinsic sense and speaks to them specifically in the areas in which they're facing challenges.
The Challenges of a Changing Market
Realtors are facing a unique challenge in today’s market. Namely, their prospective buyers, sensing the hike in prices, have decided to wait for a downturn before even considering writing an offer. These same buyers may be convinced that existing rates are too high and that affordability is nonexistent.
As a result, real estate agents are having a difficult time with listings because they're having to raise the issue of price reductions with their clients, which is not a position any real estate agent wants to be in. This is a fantastic opportunity for a loan originator to show their strategic side and prove their worth as a partner by developing presentations that really speak to their referral partners who are facing a challenging market.
Converting Price Drops to Rate Drops
You'll want to provide agents with a cost analysis—with a complete breakdown of the math—showing them the option of converting a price drop of $25,000 into an opportunity to instead offer two-and-a-half to three discount points to buy the interest rate down. In terms of net, it's going to amount to very much the same thing, but you will want to be able to demonstrate the math. It's based on a variety of factors—including the loan amount and interest rate, but there is a break-even point.
You can either discount the property outright, or use the money you'd be discounting and instead pay down the rate. This is a great strategy because you're giving the real estate agent the idea of how to market a property in a unique way.
An Attractive Option to Buyers
Price reductions are very common, but very few people have the foresight to apply the same value reduction to the interest rate, and this is an excellent example of realtor marketing. The tax code allows the buyer to secure the tax write-off and enables you to present a 30-year, fixed rate mortgage on a select property at approximately four and five-eighths or four and three-quarters.
You'll also want to take the opportunity to speak to your real estate partners about how you're strategically shifting the product that you're offering (which you should, absolutely, be doing). Many of you may have become accustomed to selling rate, because that was a big draw for the last seven years or so. Now is the time to shift away from rate and instead to focus the conversation on payment and wealth accumulation. The subject matter shifts with the client.
Increased Value over Time
There's a great program available through MBS Highway that can provide you with some truly impressive tools that illustrate through historical data just how property values can increase over a long period of time. It's this type of data that you need to incorporate into your presentations—and not just with your client, but with your Realtor partners.
You'll want to explain how and why you're changing your presentation and how it benefits them, and more importantly how you're acting with the intent to help them navigate what has become a more difficult market. You can express your intent to help move buyers into a position where they're enthusiastic about writing an offer because they no longer see the negative of higher rates, but instead are viewing things from a perspective of accumulating wealth through homeownership—which is especially effective with first-time home buyers.
In Conclusion: Competitive Thinking
Sitting down with current and new agents and showing them this evolved and adjusted presentation, relevant to today's market and how it applies to the challenges they face, showcases your innovative, inventive thinking, and provides true value to them will give you clear benefits over your competition and allow you to cement and attract new long term profitable partnerships.
Invest now, and reap the long term rewards.
If you want to learn step-by-step how to really grow your referral partner network we created The Referral Partner Success System.