Is your Lender Hurting Lead Conversion?

Thinking about partnering up with a lender? Re-evaluating your existing preferred lender partnership? Read this post to learn about the four most important things that you should be considering before partnering up with a lender.

Your choice of lenders can make or break your lead conversion rate. A good lender can help your buyers speed through the complex mortgage application process and help you close more deals.

A bad lender, on the other hand, can leave a less than stellar impression on your buyers at best and scuttle your deals at worst.

Consequently, it becomes important to find the right lender so that all the hard work you put into nurturing and engaging a potential buyer does not end in vain!

According to a report from Inman, a lot of real estate agents only partner with one lender whom they refer all their clients to. This means agents do not prefer to switch lenders after they find the right one.

So, if you are a real estate agent and you are looking to find the right lender partner, what should you be considering before making the leap?

Breadth of Mortgage Products

As a real estate agent, you will be working with a variety of buyers each with a different financial situation and loan preference. Some with great credit, some with poor credit, some that qualify for a VA loan, some that want to lock in a fixed rate, or some that prefer a variable interest loan.

In order to effectively service your clients’ needs, you need a lender that can offer, and has experience with, a variety of mortgage products. Before you start approaching lenders, think about the breadth of clients you service and their financial situations.

Take a piece of paper and write down the types of loan products your past clients have used to purchase their homes. Identify the four most common products your clients have opted for.

Next, start searching for and calling lenders in your locality or city that offer those products to narrow down the list of prospective lender partners.

However, it might be difficult to find that one lender out there that is just perfect. You might need to interview a couple to find the right one. It’s also okay to partner with multiple lenders to get the breadth of loan products your clients need.

Here are some questions you should ask be asking your lenders to better gauge their product breadth:

1. Do you offer VA loans? What about FHA loans?
2. What is the absolute minimum down payment requirement across all your loans?
3. What should the minimum buyer credit score be?
4. Do you offer both variable and fixed rate loans?
5. Do you have an easy online quiz I can send my clients to help them determine the right loan product?

Service Oriented

Buyers, and consequently borrowers, these days expect instant gratification and results. The old days of asking prospective customers to fill out long questionnaires and wait for weeks to hear back about a decision are no longer.

Before partnering with a lender, you need to be sure that he or she has the same service oriented focus you have toward your clients. If your lender has an outdated model of what your buyers expect, you could be in for trouble.

Here are a few things you should look for to determine if your lender partner is truly service oriented.

An easy online application. Specifically, check if your lender has an easy online application process for mortgages or pre approvals. A lot of lenders are increasingly offering digital applications to improve the borrower experience, and it is important your lender does as well.

Text and email notifications for updates. According to a recent BCG report, lenders who send periodic app and text notifications to their borrowers scored high on customer experience.  

Buyers expect to be instantly notified of updates in their application and also be promptly reminded if they are missing any documents or information. Your lender should already have a system in place to send text or app notifications for real-time updates.

Easily reachable. Borrowers want to be able to speak to their lender anytime they have a question. Your lender must be easily reachable ideally by text or phone during business hours and via email outside.

Stay away from lenders that only want to operate within confined business hours or expect your leads to call into a generic company support hotline.

Values Borrower Education

Let’s face it, mortgages are complex. Very few buyers have the financial understanding and experience to pick the right product for them without the help of a lender.

A good lender should recognize the influential role they play in affecting a borrower’s loan choice and act in their client’s best interests instead of their own.

Lenders that prioritize educating their borrowers before pushing them to start an application consistently have higher client satisfaction rates.

At the very least your lender should be registered with the NMLS and should have met all compliance requirements. A quick search on the NMLS website for their name or license number should be sufficient to validate compliance.

In addition, the reviews on your lender’s Zillow profile should serve as a quick sanity check on how happy their past borrowers have been with them. Any mention of how the lender simplified complex mortgage topics is a good sign. You should learn more about how your lender educates their clients about mortgages, disclosure requirements, and common financing terms. 

Lastly, tech savviness should also be considered. Look if mortgage calculators or free title quote software are being used by the lender to help clients.

Here are a couple of questions you should be asking your lender to determine if he or she is the right partner for you:

1. What does your client education process look like for new borrowers?
2. Can you share some sample educational materials you send to new borrowers?
3. How do you educate your customers about disclosure requirements?
4. Do you have your NMLS number easily accessible for your clients should they need to look you up?
5. Have you ever had an unhappy borrower? Can you share more about their story?
6. Would you be comfortable putting me in touch with 2 to 3 different borrowers that you’ve worked with recently?

Open to referrals or co-marketing

A recent report from BCG shows that lenders are not only generating online mortgage leads themselves but also capturing real estate leads in the initial stages of the home search.

And as lenders generate leads much earlier in the purchase process, even before a lead has spoken to a real estate agent, it is completely reasonable to expect your lender to refer those leads over to you.

This way your lender is doubly invested in the success of your partnership, they not only help you convert your clients better, but you also help them close more loans for leads they generate.

A lender that already has an established real estate lead referral program or network should rank high on your list. This shows that the lender has the right mindset needed to build a successful partnership with you and has the right processes in place to streamline loan applications, track referrals, and move buyers through the journey successfully.

If your lender does not have an existing lead referral program you should consider asking if they’d be open to co-marketing with you.

As long as you stay compliant with state laws, it is not unreasonable to expect your lender to pitch in a little bit into your marketing efforts be it on postcard campaigns, email blasts, or Facebook ads.

Ask your lenders these questions to gauge how open he or she is to co-marketing:

1. How do you currently generate leads? Agent referrals or online?
2. Do your leads generally have an agent they are working with or do you refer them to a specific one? If so, how can I be a part of that network?
3. Do you currently co-market with real estate agents? If so, what type of co-marketing have you done?
4. In an ideal world, how would a successful partnership with a real estate agent look like for you?

Finding the right lender for your business is absolutely crucial to converting leads effectively. While it’s easy to stick to a lender you are already working with or partner with the first lender that comes to mind, taking the time to evaluate your lenders across these dimensions will save you and your clients a lot of trouble down the road!