For those of you that work at real estate brokerages that require loan volume to be steered towards in house lending and title, make sure you are aware of the effects of what you are doing.
Self Employed? Not hardly!
You are the cheapest advertising and marketing employee (lead generator) that your broker has. If you are being required to send your clients to in- house lending or title, then more than likely either that broker or company has an ABA (Affiliated Business Arrangement). This is basically an agreement that allows for profits from the mortgage and title companies to be paid to the real estate brokerage from the loans that are closed. YOU ARE THEIR LEAD COMPANY.
That's ok; everyone has the right to make profit, right?
If making a profit at the expense of your client and negating your efforts to build a database of satisfied customers is ok with you then it is ok with me too. (not) Wonder why some clients are never heard from again?
Try on the fact that after they closed, they were told by their friends, family or credit union, that the 7.5% interest rate that they got with a 740 credit score and the EXTRA $2000.00 in lending and title fees were excessive compared to what they should have paid. Why is that? How could that be? Their realtor, who took all that time to build a relationship with them and who they trusted, referred these companies to do the work. These companies have to increase the cost of the loan to your client so they can pay the additional fees to the real estate broker and maintain their profitability in the loan.
In my research with people, when they are asked, "what is the reason that you would return to a professional to use their service again ?" The top answer is always trust. Guess what? YOU just lost their trust! Sorry you only get one shot!
My advice would be, as it always has been, to build a network of professionals that you can refer your clients to, that you KNOW (WITHOUT A DOUBT) , will take care of them just like you would. Don't look for the guy who is going to pay you the most for the referral, or the one that will send you a deal for a deal or even the prettiest one out there. IF YOUR CLIENT'S RECEIVE THE BEST EXPERIENCE FROM SOMEONE YOU REFERRED THEM TO, THEY WILL TRUST YOU and they will do business with you again. They will also refer their friends to you and your network. The network will in turn get them back to you when it is time.
Don't abuse a relationship with a loan or title professional who has the experience to get your tough deals done. They are helping you, so they can build a relationship with you. If you have no intentions of EVER sending them your "easy" business, then I say send your CRAP somewhere else.
IF YOU ARE SERIOUS ABOUT BUILDING A BOOK OF BUSINESS, THEN START DOING WHAT IS RIGHT BY YOUR CLIENT FIRST. The money will follow and keep coming back again.
Happy Selling and treat those customers like the gold that they are. (Fact: It takes far less money to keep a customer than to find a new one).
© 2008 Tom Elder
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