In the movie Jerry Maguire, there's a famous scene at the end, where Jerry expresses his love in a long-winded speech to the Renée Zellweger character. At some point, she interrupts him and says, "You had me at hello."
Unfortunately, when it comes to "courting" Realtors, you hardly ever have them at "hello". And if you don't establish enough productive, mutually beneficial relationships with Realtors in your market area, you're entering the purchase market race with one leg and both arms tied behind your back.
Loan officers tell me that one or more of the following things prevent them from getting enough purchase leads and referrals from Realtors:
"I don't know enough Realtors."
"I can't get Realtors to talk to me."
"Realtors tell me they will send me business, but they don't follow through."
"Most of the Realtors I know are too high-maintenance."
In addition, here are some other things you have probably heard Realtors say -- mostly as a way of getting rid of you:
"I already have a lender (I'm happy with)."
"My office has an in-house lender that we have to use."
"Most of my buyers already have a lender."
"I'm a listing agent; I don't really work with buyers."
"Sure, I'd be glad to talk with you, but I'm busy right now; can you call me sometime next week?"
If you've heard these kinds of responses from Realtors (and let's face it, you almost certainly have), you know how discouraging it can be. And that may help explain why so many loan officers -- given the option of choosing between focusing on the purchase market, or doing refi's -- most loan officers will stick with the relatively uncomplicated world of refinances.
Unfortunately, that is becoming less of an option, and that trend is likely to continue and become even more pronounced. So we need to figure out why you keep running into these obstacles when you try to get leads and referrals from real estate agents. If you want better results with your Realtor outreach, there are a few things you will want to understand about them:
The Culture of Realtors. Like just about any other profession, the field of Real Estate attracts a fairly diverse group of personality types and skill sets. You've probably met Realtors who were very friendly and outgoing, as well as agents who seem more shy and introverted. You may also know agents who are hard-driving "Type-A" personalities. A Realtor's personality tends to influence the strategy they use to succeed. Some agents rely on their friendliness and ability to establish rapport. Some focus more on becoming experts in real estate itself – real estate law and contracts, techniques like staging a home, having a superior knowledge of the inventory in an area, etc. still others become students of sales psychology; they focus on the skills of influence – getting people to do what they wanted to do, negotiating skills, etc.
Real estate is a labor-intensive business. An agent will typically spend 5 times as much time face to face with a buyer, for example, than a lender will spend with his or her client.
But the most important thing to understand about Realtors is that they live in a culture of sales – which is to say that the ability to close a sale is the single most valued skill in real estate. Why? Because in virtually any real estate office, there will be a select few agents who are the top producers in that office. Those agents (whether they are liked or not) get the status, the respect, and the perks.
If you have seen the movie Glengarry Glen Ross, you may remember the scene where the sales manager, played by Alec Baldwin, holds a meeting in which he says several things which have become iconic in the sales culture:
"Put that coffee down. Coffee is for closers."
"We're adding a little something to this month's sales contest. As you all know, first prize is a Cadillac Eldorado. Anybody want to see second prize? Second prize is a set of steak knives. Third prize is you're fired."
"Your name is "you're wanting", and you can't play the man's game, you can't close them, and then you tell your wife your troubles. 'Cause only one thing counts in this world: get them to sign on the line which is dotted. You hear me, you (expletives deleted)?"
Real estate is a commission-only business. If you don't sell, you don't eat. Every Realtor, from the most successful to the least successful, knows this.
Of course, almost every loan officer is compensated on a commission basis, too. So, as a loan officer, you can empathize (hopefully) with Realtors. They have a tough job.
How Realtors Tend to View Loan Officers. There is something about the way the real estate and lending industries have evolved that has contributed to much of the misunderstanding and conflict that sometimes exists between lenders and Realtors.
Here is the way the process of selling a home works, from the Realtor's point of view (let's use a buyers agent as an example):
The Realtor is the one who finds a prospective buyer, and moves that buyer to the point of committing to buying a home – something which is often very difficult to do, particularly in today's market and economy.
Having done all this very difficult work, in most cases, the Realtor now needs to see to it that the buyers are able to arrange financing so that the contract can be written, the transaction can close, the buyers can move into their new home, and everybody else can get paid. The financing is obviously a critical element of the transaction.
This is important: the Realtor is likely to see the loan officer as a vendor in this transaction. In the vast majority of cases, the loan officer did not discover the buyers, did not nurture the buyers through their education and decision-making process. The loan officer, in other words, did not make this transaction happen, but the loan officer is in a position to screw it up – either due to laziness, incompetence, ineptitude, poor organizational skills, or just a general lack of good character.
This is the perspective of the Realtor. Every Realtor who has been in this business for any length of time, with any degree of success, has had a transaction they worked very hard on "go south" because – from the Realtors point of view – the lender messed it up.
If you're going to have any success at all in working with Realtors, you really need to be able to see your profession from the point of view of real estate agents. I'm not saying you have to agree with their point of view, but you really do need to understand it, or you will get nowhere.
I've only scratched the surface here. If you really want to understand how Realtors think, and how you need to approach and interact with them if you're going to have success in getting leads and referrals from them, you should attend my free online seminar on July 18.
Free Online Seminar July 18th: How to Get More Leads from Realtors