I keep losing referrals because my clients are purchasing new homes and the builder is giving $10,000 or more in credit if they go with their preferred lender. Every time one of my referrals starts looking I cringe if they say they are looking at new homes. How can I steer them to existing homes? --Stuart from California
Legally, of course you can't steer them anywhere. And you will never completely eliminate this issue. However, there are several things you can do in order to lower the incidence of losing the business. Start from the very beginning...
- Counsel your agents to let you know if they are looking at new homes. They have a right to insist on their own lender and builders will give in many times if it means losing the sale (and still give the credit). Once the contract is signed it is likely too late, therefore you must make sure they are going let you know up front.
- Also, you can let them know you want to review ANY contract before they sign it so you can review the financing language. To me that is just good practice -- how many times have you seen a provision that may have messed up the transaction?
- Make sure the builder agents know you. It is not only about becoming a preferred lender, it is also about them being comfortable making an exception because they are comfortable with you.
- Make sure they are FULLY preapproved before they go out. If they say I have a full preapproval from a lender they know -- again, they are more likely to make an exception.
Success is not an accident. If you plan a strategy and implement it, success is more likely. On the other hand, even following each of these steps, you will lose some deals. Next week we will talk about what to do if they do sign the contract.
Do you have a reaction to this commentary or another question you would like answered? Email Dave at firstname.lastname@example.org.
Dave Hershman has been the leading author and a top speaker for the industry for decades with six books authored and hundreds of articles published. His website is www.originationpro.com. If you have a reaction to this commentary or another question you would like answered in this column? Email Dave directly at email@example.com.