There isn’t a single mortgage professional working today that isn’t tired of the phrase, ‘competitive rates, great service.’ Most people realize that this isn’t enough anymore to compete in an overcrowded mortgage space (and if you don’t think so, consider this your wake-up call). Plenty of top producers talk about offering a unique value proposition that includes educational tools and ways to stand out apart from the herd.
The tough task becomes building a value proposition based on what realtors need.
Wendalin Whitman is one of the top realtors in the country, having started her business in 1996 in Aspen, Colorado. It was a very different business then, she said, and she didn’t work with a lot of mortgage brokers because, she said, she was “too much of a workaholic to ride commission-only people.”
Now, however, Whitman said the landscape has changed in many ways. Most of her buyers are experienced buyers with a portfolio of assets that affords them better rates with the banks, she said. Those better deals mean that buyers don’t really need for mortgage brokers.
“I find that I used to have a whole pool of them, and now I’m down to two and they have to hustle and they’re not winning,” she said. “[they] can’t really step up to the plate for sophisticated people.”
Where she does need help, she said, is for unconventional situations that banks won’t touch.
“It’s the people that really can’t do it without a mortgage, people that really need help, that the banks shy away from, is where the brokers can come through and really be helpful as far as a lot of hand-holding, helping people qualify and the whole process,” Whitman said. “I need more help from those guys on the people that really question whether they can afford $650k or $900k.”
Realtors aren’t only appreciative of intimate product knowledge, but are also looking for ways that that knowledge can translate into business.
Ronnie Glomb is a top realtor based in New Jersey, and he says that the biggest thing that the mortgage industry has missed is the proper utilization of the 203k loan.
“You can put realtors in a room, and you can explain to them what that program is, but they never have the solution on how to market it for lead generation. Not one company, even a big box company, has been able to articulate to an agent: how are you going to utilize this to get more business?” Glomb said. “Realtors in general would sell more houses if they understood how buyers can use that loan . . . You’d show less houses, you would sell more houses, and you’d make more money, and none of the lenders really, they’re just not doing it. “
That may be just one small part of the picture, Glomb says, but even when originators are knowledgeable about a product, it’s not part of a larger strategy to get business.
It turns out that the relationship with realtors is a sort of Field of Dreams, if you will. Realtors want originators to create that plan so both parties can profit.
“Agents, they will follow. If you teach them, they will do it,” Glomb said.
As for that advisory role aspect that more and more top producers are adapting in order to survive, Whitman says that tactic has better success in certain markets than in others. She estimates that only five percent of her buyers need help qualifying for a mortgage, so being skilled in helping people qualify or get mortgage ready doesn’t apply.
Knowing local needs, then, becomes a big part of a mortgage originator’s success. If the credit scores are low in a particular area, then an originator who deals with credit repair can be of use to their partners. In Aspen, even though there are a lot of high net worth buyers, Whitman said that there’s also a market for people who are buying land in trailer parks, which are being converted into cool spaces. If a mortgage originator knew the ins and outs of unconventional property in an area where that’s prevalent, they could really clean up.
Whether it’s condominiums, construction, credit, or other niches, that’s where realtors need brokers to step in. Whitman says that more experienced and sophisticated borrowers don’t want to give up any extra points, whereas new borrowers aren’t so fixated on those kinds of details.
“There’s haggling at every level, which I think the unsophisticated person who goes to get their primary residence loan for the first time or try and qualify for an apartment or those people don’t have access to go, they’re not going to have the confidence to walk into a bank and say, ‘what are you going to do for me?’ and that’s where the mortgage brokers are going to be more successful.”