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Introduction to LendingTree BEST PRACTICES for Purchase Loans
With the recent shifts in the market, LendingTree has focused attention on the purchase mortgage product in an effort to assist our Lenders in closing purchase loans.In conjunction with LendingTree's Best Practices for Mortgage loan origination, LendingTree has developed some additional practices that can be used to target the purchase market.
Through research and Lender feedback, we have identified several prominent best practices that have proven ability to increase close rates on purchase loans.
Purchase Best Practices
- Designated Purchase Team Depending on volume and the Lender's ability to staff to match volumes, designate a team of Purchase Loan Officers that are able to concentrate and specialize on the intricacies of a purchase loan transaction.
- Define the Purchase Decision Cycle With a better understanding of your consumer's experience, define the typical cycle for; 1) a purchase consumer with a house selected, and 2) a purchase consumer without a house selected. Create a timeline for each process listing the events that take place in their decision cycle. List typical days needed for each "event." Refer to real estate Web sites, agents, experienced Loan Officers and your own purchase experience to draft the typical purchase decision cycle/timeline. Keep this timeline posted by your desk as a reference tool when speaking with the consumer and Realtor ® on Purchase Transactions.
- Utilize LendingTree's "Find a REALTOR ® " Tool As LendingTree's Purchase referral service, the "Find a REALTOR ® " tool provides the Lender with the ability to build and establish working relationships with Real Estate Agents/Relocation Departments. "Find a REALTOR ® " allows a Lender to add value to the customer by offering the customer an option to find a local real estate professional.
- Develop a Purchase Contact Management Methodology Create a plan of attack---your method of communicating with the Purchase Consumer. The consumer timeline serves as a reminder to their process and becomes the Loan Officer's preparation to define their method of communicating and sales strategy. From the timeline, prepare a communication timeline that coincides with the consumer's experience. Define when you will call or send an email to the consumer based on their unique process. Create email templates that speak to the "events" occurring in their process. Then establish reminders of when to send a communication/email. As an example, use Outlook Calendar as a reminder tool to contact the consumer when they place an offer on the house, after the inspection of the home, etc. Send a personalized/template email to the consumer on that day to let them know their Loan Officer is aware and interested in their transaction.
- Bring PATIENCE Into Your Pursuit Build the relationship. Different than the refinance, the purchase is not a quick sale. Remember that the consumer is making one of the biggest decisions of their life. The last thing they need is an impatient Loan Officer pushing them along to select a loan. Develop a "needs based" sales process. This is not just a mind-set; rather this strategy requires time and patience when working with the lead.
- Provide Consumers with Resources for Learning About Their Purchase Transaction From your affiliations with real estate resources and realty services, provide the consumer with useful tools that will better educate them on the purchase of a home. Buying a home can be intimidating. As a Loan Officer you are able to provide them with instruction, education, and information; which will quickly win over their confidence and their application.
- Educate Consumers Provide consumers with information that will inform them of how to make the appropriate product selection. Through email or verbal conversation, the Lender will be able to convert by educating them about the strengths of the product and the reasons for selection.
- Join Real Estate Associations Educate yourself on the Real Estate environment. As a member of local and national real estate associations, you are better informed about the ever-changing, ever-evolving purchase market. By becoming involved in associations in your area, you will become familiar with the terminology, and the purchase process, and as a result you are better able to understand and communicate with the purchase consumer.
- Thorough Training Programs to Educate Loan Officer's - Training is essential for loan officers to successfully shift from refinance to purchase loan selling. In addition to any customized training and regular sales meetings that you may make available to your team, LendingTree provides specialized training programs that will improve your loan officers' performance. For more information, please visit us on the web at www.lendingtreetraining.com.
The Real Estate Agent Is an Important Partner
- Frequent communication with the agent including copying them on borrower contacts.
- Knowing the process and being able to work to the contingencies in the contract (e.g., final commitment, credit approval, appraisal etc.)
- Always deliver good news fast but bad news IMMEDIATELY. This property is on the market and if the borrower isn't going to get the loan, let the agent know so they can act responsibly with the sellers. Remember bad fish just smells worse with age.
- Use the agent to help you with local knowledge to keep the buyer more comfortable (e.g., closing costs and local closing customs.)
- Always remember that the agent is your customer also and that working together will close deals. Do not expect the agent to do all your follow up for you when dealing with a customer who has not yet chosen a home or may not even yet be ready to go with the agent to look. Building up an inventory list of these customers will pay off with deals in the long run but if you don't communicate frequently then they will go elsewhere and all your efforts will be lost and they'll walk into another realtor or another mortgage brokers local office.
Sales Process Flow
Day One:
After an initial decision is rendered on a QF, the Loan Officer should send a soft-sell email (see canned text recommendations). This email should:
- Be informative (provide borrower with contact information voice, email, fax, address).
- Focus on specific Lender benefits.
- Should include verbiage about the lending institution.
The Loan Officer should also call the borrower to discuss their particular situation and assess their needs for the loan.
- On the first phone call, identify whether you will be selling the benefits of a lock, or the advantages of a pre-approval, by getting a feel for the consumer's timing. If it is too early to lock in, commit the borrower to a Pre-Qual or Pre-Approval letter that they can take with them while shopping for a home.
- Not Found a Home: If the borrower has not found a home, make sure that you inform them that you will be following up with them on a regular basis. Use a contact management tool to track reminders to follow up with the consumer via phone, email, and mail.
- Found a Home: For borrowers who are purchasing a home and have identified the home, there are several things that you can do to increase the likelihood of closing that mortgage. Most importantly -
- Contact the REALTOR ® . LendingTree now asks the borrower for REALTOR ® information (name, company, email address, telephone number, city and state) on the Qualification Form.
- After the borrower has been approved, ask the borrower for permission to call the REALTOR ® and let them know about your offer as well as your company! Create a relationship with the REALTOR ® - the REALTOR ® may start suggesting that borrowers use your services in the future!
Day Two:
The Loan Officer sends a follow up email based on the result of the Day One call. Make sure the email includes relevant next steps information (i.e., I will take the liberty to follow up with you via telephone in X days)
- If there has been no prior contact, this should be hard sell focused on benefits and competitiveness of the offer. The Loan Officer needs to create a sense of urgency for the borrower.
How to communicate a sense of urgency:
- Focus on changing rate environment (i.e., look for news articles about changing economy and send Web page links to customers).
- Explain why you have the need to communicate with borrower Inform them that you want to discuss their specific needs to ensure you find the right loan for them.
Found a Home Customers:
If there has been prior positive contact, the Email should be more informative and friendly (i.e., send a link for an industry Web site or news site, or send the URL for a particular story about mortgage rates or attach a company press release). The Loan Officer needs to create a sense of "partnership" with borrower and REALTOR ® .
Sample Web Sites for Articles:
Not Found a Home Category:
You will need to put more time and effort into converting purchase borrowers who have not yet found a home . Several things you can do to forge a relationship with this borrower are:
- Send a package to the borrower that includes information about your company. Include an introductory letter to the borrower telling them that you are here to help them when they find a home, and every step along the way.
- Send personalized emails to the borrower, including links to sites that may be of interest (ex. real estate sites, home design sites, architectural publications, etc.) with a quick note that states "I just stumbled onto this site
thought you may be interested. Talk to you soon!" This personal touch may mean the difference in choosing you, an on-line provider, over the brick and mortar down the street.
- Make use of LendingTree "Find a REALTOR ® " tool to connect the customer with a REALTOR ® who can help them find a home.
Day Four and Beyond:
Found a Home and/or Has a Contract:
The Loan Officer follows up via telephone
- The Loan Officer can reference earlier email.
- The Loan Officer can use the customer service angle We know that you may still be shopping the market and would like to ask a few questions about your needs in order to better improve our service? Position it as more of a question/answer, not a hard sell.
- Continue to follow up with the realtor on status of the loan.
Not Found a Home Category:
There are a variety of ways to follow up in an automated way, especially if Lender is using a contact management system with a tickler file.
We recommend that the Loan Officer regularly sends the borrower an email and then follows up 3 days later with a telephone call.
Follow-up Examples:
- Email/call the borrower immediately each time you see rates drop a bit.
- Continue to send resourceful articles or Web sites that reference buying a home.
- Send Lender Customer Testimonials.
- Articles and Web links to specific real estate sites (especially if the borrower is a shopper).
- Any press releases or newsletters issued by Lender.
- Set tickler to send birthday email message or card.
Phone Calls:
When making phone calls to customers, remember the key points below:
- Project a positive, enthusiastic tone of voice!
- Be knowledgeable in your product matrix.
- Use "polite persistence", stay organized and project confidence.
- Modify your rate of speech and volume to match the customer's while remaining positive and consistent.
Emails:
When sending emails to customers, remember the key points below:
- Always ensure your name and organization is easily recognized on the email.
- Include your contact information such as phone, fax and cell numbers.
- Keep your message short and simple. People often do not read long emails.
REALTOR ® -- A registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS ® and subscribes to its strict Code of Ethics
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