About 80% of all home buyers are introduced to their mortgage lender by their real estate agent. So, if there were 500 purchase transactions in your market last month where the buyers did not use their own cash, 400 of them were referred to their loan officer by a Realtor®.Unless you want to focus exclusively on refinance business (not a good idea in my opinion), it would be difficult for any loan officer to succeed in today’s environment without developing productive, win-win relationships with Realtors.
Your ultimate business goal is to control your own destiny by creating a superior product, and getting the message about your superior product out to as many potential homebuyers as possible. To do that, you have to find the people who are going to be buying homes in the near future.
Since what they want to buy is a home (and not a mortgage loan), they’re looking for homes! To attract prospective buyers, you need listings. And who has the listings? Realtors do!
That’s one reason why you should develop productive partnerships with Realtors. Another reason is that you need your customer to buy a house before your mortgage loan is going to do them any good. And you don’t sell houses. So sooner or later they’re probably going to be dealing with a Realtor, and it might as well be one of your Realtor partners, because your clients are probably going to end up spending more time with the Realtor than they do with you. If that Realtor happens to be someone who doesn’t like you, or even if they’d just rather somebody else did the loan, the chances are better than even that you can kiss that client goodbye.
Yet many loan officers resist the idea of working with real estate agents. In more than 20 years of coaching originators, I’ve heard all the stories about the nasty, mean, lying, cheating, double-crossing, unprofessional, cheapskate, disorganized idiot Realtors. But there isn’t a Board of Realtors in the country that requires its members to be nasty, mean, lying, cheating, double-crossing, unprofessional, cheap, disorganized, or idiots. In fact, one might reasonably argue that the real estate industry would discourage such conduct, since it’s bad for business.
Besides, if you think real estate agents are bad, then you should meet some of the loan originators I’ve encountered! Every profession has its bad eggs.
Do You Have a Low Opinion of Realtors?
If you’ve had mostly unpleasant experiences with real estate agents, and that affects your willingness to contact them about the possibility of working together, consider the following:
· Self-Fulfilling Prophecy? It’s amazing how often you get what you expect to get, especially when you expect it to be negative. If you have a low opinion of Realtors, do you think they might possibly be picking up on some of your vibe? An expert in reading human body language can look at two people and unfailingly tell you how those people feel about each other. While most of us don’t have that kind of training, we all have a kind of internal radar that usually tells us something about the way we’re perceived by another person, especially if we’re face-to-face. So if you’ve got some negative preconceived notions about real estate agents, or even if you’re ambivalent about them, chances are pretty good that they will pick up on that at some level.
· Over-Generalizing from Limited Experience. Sometimes a client will tell me, “I tried that, but it didn’t work.” Invariably, it turns out that the “trying” represented a minimal effort, followed quickly by giving up. Since we’re talking about getting appointments with real estate agents, I recall a recent conversation with a client who said that he’d “tried” to make some calls to get appointments, but that “it” didn’t work. So I asked him how many calls he’d made. “About 10,” he said. “You talked to 10 agents and they all said they didn’t want to meet with you?” I asked. “No,” he replied, “I called 10, but I only talked to 2. One of them said she wasn’t interested and the other one said he would have to check his schedule and get back to me.”There are close to 1,000 full-time real estate agents in this client’s market area. He had concluded, on the basis of 2 actual conversations, that what he was doing “wasn’t working.” In other words, he had reached this conclusion on the basis of a statistical sampling of 2 tenths of one percent of the entire sample size. Let me give you an analogy that illustrates the fallacy in this line of thinking:
You ask someone out on a date.
You are rejected.
You do it again with the same result.
And, you stop asking, assuming that every single one of the other 4 billion people of that gender will have the same response.
I don't want to be rejected.
You don't want to be rejected.
We don't want to feel the regret of looking bad and feeling rejected.
Therefore, we stop asking.
If you stop asking, you may spare yourself the pain of being rejected, but you’ll never succeed, either. You will fail to get 100% of the appointments you never ask for.
· Prior Bad Experiences with Realtors. Maybe you got blamed for something that wasn’t your fault. Maybe a Realtor (or more than one) was extremely high-maintenance during the course of a transaction. Maybe some of them treated you like they thought you were the hired help. Maybe you were refused entry into a real estate office. Maybe an agent pressured you to cut your commission (which you assume he did in order to “look good” to the client). Maybe you referred a client to a Realtor and she tried to steer your client to a competitor. Any of these experiences would be discouraging, but are they really representative of the way most Realtors behave? (See the section above.) Moreover, we all have a tendency to view our past experiences through a perceptual filter that renders us blameless in the matter. Could some of these negative experiences have been prevented if you had been better prepared, or had more to offer? Could you have communicated more clearly your expectations of the relationship with the agent? As a mentor of mine liked to say, “Did you ever notice that whenever there’s a problem, you’re there?”
Before You Call for the Appointment …
In a moment, I’m going to give you some scripting that will be very effective in getting real estate agents to agree to meet with you. Before I do, though, let’s look at the conditions that will need to be present in order for that agent to agree that he or she wants to meet with you.
Why would a Realtor want to meet with you? I think we can agree that most agents would have no such desire unless they believed there was a very good chance that the meeting would produce benefits for them. In other words, unless they think there is something tangible in it for them, there wouldn’t be much incentive to agree to an appointment.
What can you offer that would provide that incentive? What do Realtors want that you can provide?
Well, it would be darn close to universally true – especially in today’s market -- that real estate agents want to close more transactions; they want to make more money.
That means they’re not interested in listening to you talk about yourself, your company, your products, your pricing, or your service. They don’t even (gasp!) care about the wonderfulness of your personality. They want to make more money. Focus your attention on that (and them), and you have a chance of getting somewhere with them.
Following this logic, you can see that agents might agree to meet with you if you tell them that you have a way to help them sell more houses – but only if you have one more thing going for you -- Plausibility.
This may come as something of a shock to you, but there are actually people in this world who will promise you something and then not deliver on it! Realtors know this (a cynic might argue they know it because they themselves are among the world’s most expert practitioners of this art), so if you tell them you want to meet with them so you can show them how you can help them sell more houses, most of them are going to want some evidence that you can back up this claim. That evidence is what I mean by plausibility.
How Do You Provide Evidence that You Can Help Realtors Sell More Homes?
The most effective way to prove to a Realtor that you can help them sell more homes is to provide verification that you’ve done it before – that you have a record of originating transactions and referring them to real estate agents.
Every business has its own culture. In a “new-age” kind of company like Ben & Jerry’s Ice Cream, for example, the culture is egalitarian; the workers are told that they’re all members of a team. Roles are not as hierarchical as you might expect them to be at a company like General Motors, for example.
In most real estate offices, you’ll see what I would call a sales culture – where the respect and the “love” – not to mention the money -- are apportioned according to how much you produce. Here’s the way I put it in a previous article on the subject:
Realtors® live in a sales culture in which Production is King. Top Producers – the people who consistently prove that they’ve got what it takes to close -- get the respect, the money and the glory. (You’ve probably noticed it’s the same way in our business!) As a loan originator, if you get the feeling that the Realtors® you call on don’t respect you, maybe it’s because you’re always showing up in their office with your hand out, and you never bring any deals of your own to the table! In any organization, the person who can deliver the business ALWAYS gets respect. When you start adding to the Realtor’s business, they will respect you. If you don’t, they’re going to see you as a vendor. And vendors don’t get much respect. Only Partners get respect.
When loan officers are unable to make headway with the better agents in their marketplace, it is usually because they have not made themselves valuable enough for a successful Realtor to want to give them the time of day. If you want to be respected by a real estate agent, be a player – prove that you can carry your weight in a business relationship that lives or dies on the ability to generate leads and close sales.
So, you’re about to call a Realtor for an appointment to make your presentation -- can you prove you have a record of referring business to Realtors? Can you give this agent the names of other agents you’ve helped to become more successful? When was the last time you found a buyer or seller on your own and referred them to one of your agents?
Maybe you don’t have any proof. Maybe you’re new to the business, or maybe you never saw it as part of your role to feed business to real estate agents, but you recognize now that this is why they don’t respect you or treat you very well – and you’re willing to change your strategy. If that’s your situation, you can still get appointments with agents. Here’s how:
First, you paint a picture for them, using a combination of facts, persuasive logic and inspirational vision, which enables them to see that you truly understand their situation and the challenges you face, and that you have developed a plan to make them more successful.
Second, you fortify your analysis by being able to cite outside authorities that lend credibility to what you’re saying.
And finally, you lower the perceived risk associated with their agreeing to meet with you, compared to the potential rewards of such a meeting. If they see that there’s a reasonable chance you might be on to something that would really help them, and they have very little to lose by giving you a chance to make your case, you’ll get the appointment.
What to Say to the Realtor®
Here are some examples of what you might say:
One Approach: Hi, this is Mary Smith; I’m a loan officer with Fantastic Mortgage, and I have a question for you: If I could show you how I can help you close 1 or 2 more transactions per month, over and above what you’re already doing, would you be willing to give me about an hour of your time so I can show you how?
This approach is straightforward; you promise Realtors® you’ll show them how to close more transactions if they’ll give you an hour of their time. If you can sound confident, professional, and conversational (as opposed to sounding scripted), you’ll probably succeed at getting an appointment about 25% of the time, maybe more than that.
In some cases, the agent might answer your question with a question, probably something along the lines of “What’s this all about?” They’re not saying “No,” – yet --but before they agree to give you their time, they want to know, in a nutshell, how you propose to help them close 1-2 additional transactions a month. It’s a fair question, one you yourself might ask in a similar situation. How would you answer it?
Assuming you’ve prepared a presentation, you might be tempted to give them the highlights, or an executive summary – and that might be a mistake. Consider this scenario:
Realtor: What’s this all about?
You: Well, I have a call capture system and we use that in conjunction with sign riders on your listing signs, and with your listing ads to capture buyer leads. I follow up with them and prequalify them, and then refer them back to you to sell them a house.
Realtor: I tried call capture before, and it didn’t work. But I’ll keep you in mind. Thanks for calling.
No matter what you tell agents about what you have in mind, there’s a good chance they will simply use it as a hook to compare it with something they’ve already “tried”, or something someone they know has “tried”, that didn’t work.
But what if the conversation went something like this?
Realtor: What’s this all about?
You: I just got the results back on a study I commissioned on what’s going on in our local real estate market, and as I’m sure you’re aware, there are some pretty serious challenges facing us right now.
The findings of our study go a lot deeper than just describing the statistical problems with real estate sales -- they actually identify the 6 core reasons for declining sales, and recommend a set of pretty powerful strategies to deal with these problems. Since my success is linked to the success of agents like yourself, I wanted to offer this information to some of the better agents in the area so you can start getting out in front of these problems in our market.
I’ve put this information into a very concise executive orientation, and I’m in the process of presenting it to some of the top real estate agents in town. I wanted to make sure you also got a chance to see this important information.
The findings take about 38 minutes to cover, and then usually you’ll have some questions, so most of the sessions last about an hour. We can meet for breakfast or lunch or coffee, my treat, but I only do these at a time when you won’t be disturbed, so we can both get in & out quickly. When’s a good time when you can sit and have a good educational experience without being interrupted?
If the Realtor still pushes for details of what you want to talk about, you can respond with something like this:
You: John, I appreciate your interest and curiosity. I hope you can understand that this is proprietary information I only want to share with Realtors who have an interest in working with me and would give me the time to show them my research and explain my findings and solutions. I can promise you this, though: I’m very conscious of the value of your time and I respect you and would like to work with you, so the last thing I would do is waste your time, because that would be counterproductive for me too, right? So is there a time this week when we could meet?
See what we did there? You politely gave the agent a credible reason for not going into detail over the phone (you’re not going to waste your good ideas on people who won’t give you the time to properly explain them), and you’ve tied that to a recognition on your part of the value of their time, and you’ve let them know that you realize it would be foolish of you to get them to commit to spending an hour with you, and then not be able to deliver something worthwhile! It would be a lot harder for a Realtor to say “No” at this point.
(Just be very sure you’ve got a strong presentation to show them. I’ll have a lot more to say about that in my next article on working with Realtors.)
Here’s a variation on the first approach:
Second Approach: Hi, this is Mary Smith; I’m a loan officer with Fantastic Mortgage. I noticed that you’ve closed 12 transactions sides last year, and I have a question for you: If I could show you how I can help you close 1 or 2 more transactions per month, over and above what you’re already doing, would you be willing to give me about an hour of your time so I can show you how?
The second approach is similar but adds this wrinkle: you’re showing the Realtor® you’ve done enough preparation to know how much business they’re doing. That will impress most people. (You’d need to have, or know someone who has, access to your local MLS system, and you’d need to know how to run reports in it, in order to know their production, but it will probably be worth the effort, because the MLS has a wealth of information about your local real estate market that you can use in all kinds of interesting ways.)
Anything you might mention to agents that shows you’ve taken the time to learn something about them personally before you called them would have a similarly positive effect on the way they receive you.
Now for a third approach:
A Third Approach: Hi, this is Mary Smith; I’m a loan officer with Fantastic Mortgage. I’ve been working with a preapproved buyer who’s qualified to buy in the $________ range, and they’ve asked me to refer them to a buyer’s agent. I’ve heard good things about you, and I understand you’re familiar with the _______ area, which is where they want to buy. Before I make the referral though, I would like to meet you and get to know you a little better, is there a time we can have coffee or lunch in the next day or two?
In 20 years of coaching loan officers, I’ve never seen that approach fail to get an appointment! Of course, to use it, you have to be generating your own consumer-direct buyer leads. If you’re not doing that, and you’d like to, take a look at my 12-week course, Double Your Loan Originations, here.
Other “Objections” and How to Handle Them
Here are some other things you might hear from Realtors when you call to schedule a presentation appointment:
“I’m not interested in (or don’t think I need any) additional info.”
“You know, [NAME], I couldn’t help but notice that you’ve only closed _ sides so far this year. But I’ve heard good things about you and I think you’re better than your numbers are indicating right now, and that’s why I called you. Are you saying you don’t think you need to learn better strategies for succeeding in this tough market?”
“I don’t have my Day-timer with me.”
{Laughing} “[NAME], If I were a hot buyer calling and I wanted you to take me out to see a house I’m really excited about, would you be telling me you don’t have your Day Timer? What I’m telling you is that the information in this briefing could change everything for you, it can literally double the amount of business you do this year. So if you need your Day Timer to schedule a time for me to show you this information, here’s what I’ll do for you – do you have a pen? I’m going to give you three days & times I have open right now. Here they are, write them down. [GIVE 3 TIMES]. I will hold these times open for you until 5:00 pm today. Check your schedule and find out which one works best for you, and then call me. If you get my voice mail, leave me a message and let me know which time you want. Do you have my phone number?
“Call me back in a few days.”
“[NAME], in a few days all of my presentations will have been scheduled. [SEE ALSO ABOVE RESPONSE & USE SIMILAR VERBIAGE]
I’m already working with a lender.
Yes, I assumed that someone who’s gotten to where you are in your career has already established relationships with one or moredependable lenders. As someone who is on the other side, I can tell you that I appreciate your loyalty.
What I want to do is see if there are some things you and I could do together that wouldn’t interfere with any of your current relationships that would produce additional business for you over and above what you’re already doing, fair enough?
YOU COULD ALSO ADD THIS:
My ultimate goal is to earn all your business, because you know, loyalty is a two-way street. Any competent lender will take care of the business you send them, but do your current lenders work hard to send you business? Do they spend their own time and money trying to develop clients to send to you?
Next in this Series: How to make a presentation to Realtors that will have them wanting to work with you.