6 Ways to Generate More Referral Business from Real Estate Agents
As a mortgage lender, your reputation precedes you. The way you build that reputation may very well dictate your success. In today’s highly competitive market, a steady stream of referrals means the difference between maintaining a pipeline and scrounging for leads. And as we move towards market recovery, a robust book of business will serve as an invaluable tool to take full advantage of profitable opportunities.
Real estate agents still hold the keys to the referral kingdom. Having solid relationships with the top real estate agents in your market can make a major difference to your lead funnel. To complicate matters, the recent landmark agreement with the National Association of Realtors (NAR) could soon transform the way homes are transacted and the role real estate agents play in buying and selling. While the aftermath of this settlement remains to be seen, it’s likely that the bar will be raised for agent performance, with buyers emboldened to shop around for top performers who offer above-and-beyond services, expertise, and connections.
Now more than ever, real estate agents are incentivized to show clients their value. A crucial piece of that value is delivered through referral relationships: If agents provide connections to reliable resources throughout the home buying process, they’ll earn their commission and build a strong name for themselves.
In the environment created by the NAR settlement, then, lenders have a major opportunity to build valuable, symbiotic relationships with real estate agents. Wondering how exactly to foster these connections? Here are our top tips.
1. Over-communicate.
This should go without saying, but the more you communicate, the more the agent (and borrower, for that matter) perceive you as trustworthy and reliable. This means multi-channel communication. Whether email, phone, social media, or even face-to-face, vary the channels you use to communicate to be sure your message is heard loud and clear.
No updates? Tell the agent that. No communication is bad communication, so keep in touch even when there’s nothing to report.
“My go-to guy calls me every week on Tuesday with an update, even if nothing has changed,” says Colorado Realtor Mindy Jensen. “This is awesome! When I’m juggling 12 clients and offers, It’s nice to know who is at what point in their loan process. And if you’re waiting on something from the buyer and let me know, that allows me to put pressure on them to send it.”
Know when to incorporate technology to help with this. Leading digital mortgage platforms like Maxwell offer automated real estate agent updates and include chat and messaging features so the borrower and agent are intrinsically tied to the loan process, making it easy for you to keep them in the loop.
Mortgage technology is the easiest way to help you define and implement a process (and stick to it). Because agents must pick up the slack when you fail to communicate, if you can a) implement a communication system, b) make the agent aware of it, and c) follow through on what you promise to the agent, you will stand miles above the competition in their eyes.
And hey, sometimes things don’t go as planned. Maybe a quote misses the mark or underwriting takes longer than expected. Don’t allow the agent (and buyer) to feel ambushed at closing because you ignored or downplayed a problem, rather than being up front about it.
At the end of the day, communication is your most useful tool to develop trust. It allows for smooth conflict resolution and helps keep the borrower and agent happy.
2. Set realistic expectations.
From your very first interaction with the agent, be clear about what is feasible to accomplish: Real estate professionals only want to work with lending partners with a proven track record—someone they can trust to help clients get what they need to close on time.
As the old motto goes, underpromise and overdeliver. Keep the agent informed if things deviate from your original plan. Running behind schedule? Let the agent know. If you’re going to miss a deadline, let the agent/borrower know before the deadline is missed.
Communication plays a big part in this; by communicating proactively and managing expectations, the agent and borrower don’t feel blindsided when there’s a misstep, so they’re more likely to take things in stride because they knew what was coming.
By setting realistic expectations about what you can accomplish, you set yourself up for a happy agent and borrower, even if things deviate from the original plan. Any agent worth doing business with will appreciate your honesty and accountability and will want to work with you in the future because of those qualities.
Above all, just remember that if you don’t live up to the expectations you set, the relationship is over. The game is, essentially, yours to lose.
3. Keep it local and find your niche.
One sentiment we heard from agents over and over again was that they only wanted to work with local lenders with intimate knowledge of their particular market. The ability to meet both the agent and the buyers in person was invaluable to the agents we spoke to:
“It’s in my buyers’ best interest to work with a local lender. Someone who knows the local market well and who I know can get the deal done. I want my clients to have the confidence knowing we’ll close on time. With little to no surprises on the money front.” —Chloe Seymore, Compass
Additionally, specializing in a particular niche in your local market is an organic way to attract agent business. One agent we talked to in Colorado had a dedicated lender he always used for listings in the mountains because the loan officer had an unrivaled understanding of that niche of the market.
Focus on building your brand in your local market; join local real estate networking groups or your local chamber of commerce. If in-person events aren’t available in your area, consider joining dedicated Facebook or LinkedIn groups for your area, and become a thought leader by regularly contributing valuable advice and insight. The more you become recognizable in your local community, the more likely agents will be inclined to give you a shot.
4. Be an industry expert.
According to Maxwell’s Millennial & Gen Z Borrower Sentiment Report, nearly 70% feel that they have “some,” “very little,” or “no” knowledge about the mortgage process, and a third find the process to be confusing.
The mortgage process is still very complex, and if you can prove to the agent not only that you’re an industry expert, but that you’re ready to go above and beyond to help the borrower understand the process and feel confident about it, you will have a considerable leg up over other lenders.
Stay on top of industry trends and be sure you can explain things in terms the agent and borrower can understand. Don’t just assume they already know how the process works.
Content marketing is a great way to achieve this, as well as an excellent opportunity for collaboration with the agent. Try creating branded one- or two-page guides that anticipate borrower questions or help eliminate confusion from the process, like what not to do so loans aren’t rejected after pre-approval or commonly asked questions about mortgage loans.
Having information readily available for homebuyers will be sure to raise the agent’s eyebrow, and offering to co-brand the content with them will only further entice them to work with you in the future.
5. Proactively maintain positive momentum.
To help any relationship grow, it’s important to make sure you’re depositing more than you’re withdrawing. In this context, depositing value might mean offering market information, sending helpful data and articles, or engaging your real estate agent partners with casual touch points, regardless of whether you’re actively working a deal together.
“It’s easy for LOs and agents to fall into a purely transactional relationship,” explains Michael Malone. “But as an LO, you need to look at agents like you look at the clients in your pipeline. In other words, you need to be sending them proactive information and facilitating touches regularly. You need to always try to provide value and ask for the business there.”
After all, you never know what opportunities might arise—even outside of a typical home purchase transaction.
“Agents, by nature of the business they transact and the clients they serve, are gatekeepers to all kinds of real estate activity,” says Michael. “Think about it: When home buyers have a question, oftentimes their first call is to their real estate agent. They might be asking for a contractor, someone to facilitate a repair, or for a recommended lender for a refinance as rates shift. There are so many different opportunities for business, even when a real estate transaction isn’t directly involved.”
6. Go above and beyond your lender competition.
The ultimate differentiator, of course, is a willingness to take that extra step your competitors don’t quite reach. This could mean being available for your most valuable real estate agent connections outside of work hours, proactively communicating when you’ll be unavailable, or even “guaranteeing” closing dates. If you’re willing to work hard to offer top-notch service to the agents you serve, you’ll steadily grow a reputation of excellence that travels through the referral channels of your market.
This might even include being helpful and insightful in situations that don’t provide immediate reward or compensation. Realtor Mindy Jensen, for instance, recounts a story that illustrates the value of her go-to lender: “I am primarily a buyer’s agent, but had two listings coming up. I was lamenting to my lender that I wouldn’t be able to recommend him to the buyers because I’m not representing them, and he offered to review the buyer’s qualifications by speaking to the lender they were using. This was so nice of him—helping me to be sure we were choosing the right offer in a bidding war while also getting absolutely nothing out of it.”
While offering this level of service requires significant work up-front, you’ll find it translates into regular, lucrative business in the long-run. As Mindy succinctly points out, “How much do I love my go-to lender? I closed 10 transactions over two months. He was the lender for eight of them. The only reason I didn’t use him for all 10 is that the other two were cash.”
Learn more in Winning Agent Business: The Lender’s Guide to a Strong Referral Network
Download your free copy Winning Agent Business: The Lender’s Guide to a Strong Referral Network to learn:
- Firsthand accounts from real estate agents on how lenders can earn more referral business
- The 4 qualities real estate agents value in their lending partners
- Agent networking dos and don’ts
- How to become a go-to lender for real estate agents
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