Marketing can leave a bad taste in your mouth
Over 20 years ago, as I was starting out in the mortgage business, the advice I received from senior brokers was to “stop into realtor’s offices with a box of donuts.” Last year I was participating in an industry roundtable and the powerful head of a major mortgage company related that he provides an allowance for his agents to take donuts to realtor’s offices. I had to smile; some things just never change. Bribing realtors with sugary confections has been and remains a bad idea on so many levels.
First, the sugar and empty calories are horrible for our realtor friends. Second, you immediately present yourself as a gofer. You are no longer an equal professional, but the lackey who will do the mortgage paperwork after the professionals have done the real work of selling the property and maybe pick up a latte for the busy agents while you’re at it. Third, and most important, the realtors should be bringing you donuts! Mortgage brokers have been unfairly programmed to “beg” realtors for deals and perform silly services to be in their good graces so they will throw you a bone every now and again. Bottom line: The agent who controls the client deserves the donuts.
Mortgage brokers need to spend their energy focusing on attracting clients directly rather than begging others for clients. Begging realtors or other professionals is a weak marketing strategy that will inevitably lead to failure and undermine your professionalism. There are many actions that you can undertake to have your message directly to the consumer. Bring the consumer to the table, let realtors know that you are a performer and let them vie for YOUR referrals.
Taking your message directly to consumers requires planning and careful thought. It should be based in your strengths and weaknesses and of course your interests. I have spent many hours and in some cases several days coaching agents on how their interests, strengths and weaknesses are all critical to a finely tuned and workable marketing strategy.
Recently I had a client who was interested in executing seminars. She had partnered with a realtor, but was footing most of the bill for the seminar (programmed belief that the realtor was more important). Her topic was “first time home buyers.” They were using the headline “Stop paying your landlords mortgage.” They had put on three previous seminars that attracted a combined total of seven people and no real prospects in the end.
My first advice was to dump the dead weight realtor “partner”. If your partners are not carrying their share of the load, they are not partners. Trim the fat, before you move on. The second advice was to put the tired clichéd headline to rest. Every resident of the free world has already been asked to “kiss the landlord goodbye” or to “fire him” and so on; additionally, the majority of those who were interested in buying their first homes probably already done so or are fearful of buying in a declining market. I suggested that she change the focus away from “buy your first home” to “get a hot deal”. The seminar now targeted the same group of young professionals that were renting, but the message was decidedly different. The seminar focused on buying properties well under market. She talked about buying pre-foreclosures, REO’s and short sales for 40-60 cents on the dollar. Some additional tweaking in how she promoted her seminars increased her average attendance from two to 20. Best of all more than half of the attendees were interested in buying pre-foreclosures, clients that she can pre-qualify and refer to realtors.
NOTE: If you do not know how to properly structure short sales to obtain the deep discounts, you need to learn that before you use this strategy.
Yes, she gets a lot of donuts these days.
Going forward, mortgage brokers need to explore opportunities that draw prospective buyers to them directly. Seminars are a good way to do this. Unfortunately, most seminars presented by agents frequently end in disappointment, due to a low turnout. The primary reason for low turn out is that the events are not presented as something of importance and of interest. If you open the real estate events section of your local newspaper, frequently you will see listing for seminars with the obvious and dull titles, such as “First Time Homebuyer’s Seminar”, “Financing Your First Home” or “Stop Renting and Start Owning”. These topics are stale. Additionally, be conscience of the fact that loan programs may not be available for the typical no money down first time buyer.
New and exciting headlines will begin to target a new group of interested clients. For example, with the seminar described above, our agent wanted to attract upscale renters who had not yet bought a home. Upscale, because the buyer will need money down or be able to go full doc. Her marketing targeted selected rental areas and publications. Her message needed to motivate these buyers to learn more about why they should buy now, in a declining market. The message was clear, deals were to be had. Her seminar title, “Buying pre-foreclosures at 40 to 60 cents on the dollar” got the attention of first time buyers and investors at large.
Building partnerships and working with peers can be very successful, but we must not rely too heavily on the trickling down of potential business. We must create our own powerful tools to attract clients directly. Done correctly, realtors and other professionals will look to you for business as opposed to you always looking to them...
David K. Lal is a licensed broker, a frequent trainer on real estate matters and a consultant to top producing mortgage and real estate professionals. Lal currently serves as the president of the non-profit, National Real Estate Council. Join other top agents in a twice a month free Power Conference Calls to learn new strategies, marketing and legal updates at www.nrecweb.org/training. Lal can be reached at email@example.com or by calling 888-97-4-NREC.