I wrote this article for Loan Officer Magazine a number of years ago. I think it is still applicable and the response I received two years ago tells me that many people have considered and tried it. Please let me know of your successes.
Here we go...
As world events have so recently showed us, it is important to be thinking into the future. To position you for loan referrals that are not based on rate. To become and be viewed as an authority in your profession not just another loan officer waiting to take your application.
Let's face it. If you are the little guy like me you have to be flexible and forward thinking. If we focus on the lowest rates, we can be shut down by the big lenders at anytime. They have the resources to buy the market. We don't. This is why we have to think. That is what we get paid to do. We only get to fill out the application after we have successfully sold ourselves (via sound advice and thought) to the client.
To this end it is important to market yourself to affinity groups. This is not a new concept by any stretch, but it is one that is forgotten in the flurry of refinances and new home purchases when rates are down. When is the last time you got out of the office to make a sales call? IT is hard for everyone, but it is vital.
Instead of making that traditional sales call to a Realtor or Builder, let's put on our prospecting swim trunks and swim upstream. Where do they get their business? How can you get to the clients before they do?
We have a loan officer in our company that has several relationships with local unions. These include the CSEA (county and municipal employees), local PBA (police officers), and CWA (communication workers). These folks have jobs with good verifiable salaries; stable futures and they buy homes. In other words, folks with money, credit and income. Last time I checked these were the people we wanted to talk to.
How do you approach them? First find out if you know of anyone that is in a union. This isn't too hard. Next, you will need to listen and find out more about their union. What do they like about the union, what do they dislike. You are on a fact-finding mission. Once you learn a little more about the union itself, find out the types of benefits they offer. Do they have an association with a mortgage lender? What are the benefits offered by this lender? More often than not they don't have this benefit or they don't know about the benefit. If it is with a major lender, does the lender offer close personal service? If the loan officer can only be reached via an 800 number you are in.
Once you have established a need for the service, you need to come up with a way to market it to the members. We had a meeting with our appraiser, attorney, title company and had everyone give a little. The appraiser gave $50 off, we dropped our application and document preparation fee, the attorney cut $50 and the Title Company offered to pay for departmentals and municipal searches. Very quickly we had over $650 in savings. We approached the union member that we new with a flyer customized to their local and had them take it to the business agent for the union. We let him sell it to the membership. The reason we did this was to ensure he would endorse the program. It also made him look a feel important in front of the members because he was offering the benefit to his members. It also made him more enthusiastic about the program. He became our sales person and referral source.
Once you have the business agent on board make sure the first couple of loans go very smoothly. This will ensure you are successful. If you blow the first couple of deals the business agent will not sell you anymore and will drop the program, or worse teach your competition how to run it. Remember the business agent has become your Realtor for the union. Keep him in the loop with your successes and challenges. He'll appreciate it.
Like any referral relationship you will have to constantly seek ways to add value to the client. Offer to speak at meetings, offer seminars to the members on credit and available loan programs. Be a sponsor at events like golf outings and have a sponsor presence in their union literature. You will also need to keep the offer special. For them to take advantage of the program they will need to present their union card at the application. Make of copy of the card for the file. This will ensure they are compliant with their end of the deal. If you are ever questioned for a change in fee structure for these clients you will have their union card in the file to show why they received special treatment and pricing. You are not discriminating against others; you are providing a benefit to a specific group.
What are the long-term benefits of the program? In the past year we have provided 6 new buyers to our regular Realtors. We have also been able to refer two listings. The Realtor doesn't get on board easy. You want an experience buyer's agent and a top lister. Your referral of their service will reflect on you. If the Realtor is not professional it will diminish your value to the union. To ensure the Realtor appreciates the value of your relationship with the union, interview the Realtor as though you were going to list or buy a home yourself. I told the agents I refer that they would have to help me defray some of the advertising costs for this unique position. They help me with my ads. In my market the average sales is $240,000. That listing is worth a total Realtor commission of $14,400. Our commission is not near that. The right agent will see the value. If not, move on. They realtors will talk about this in their office and other agents may approach you. Carefully interview them and use them with the next union. You can see where this is going.
When I offered this to my loan officers all my so-called producers said no. They were too busy. I turned the program over to my two newest loan officers. They work three unions together and have cultivated three agent relationships. Guess who the new number 1 and 2 are, after only 6 months in the business!
My suggestion to Sales Managers is to try this with new loan officers. Don't let them anywhere near a Realtor. Have them develop this program with a service mindset. Let the program cultivate leads for top agents and then let them meet the top Realtor, not just any agent. Your loan officers will achieve more success quickly and they won't develop call reluctance that comes after walking into dozens of real estate offices with little chance of success.
Best of luck to you in your endeavors. Don't get your newest most enthusiastic people into the old failed system of mortgage prospecting. Show them a better way and share the success with them.
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