HousingWire: What’s happening right now in the Realtor world that lenders should know more about?
Brian Boero: Well, this may seem obvious on the surface, but agents and brokers are facing a level of industry change that simply hasn’t existed before. I’ve been in this business 25 years, and the mix of disruptive forces at play right now is new, real, and, I think, lasting.
First of all, there are simply too many Realtors chasing too few homes for sale. There were 1,522,801 Realtors in America as of the end of February. That’s nearly 200,000 above the previous peak in 2006. This has created an environment of scarcity. Agents and brokers are anxious about this, and no one sees it changing any time soon. There are too many mouths to feed from a shrinking table.
For those agents who do have plenty of business, the velocity of the market is unreal. Working with buyers scrambling to compete in an insane seller’s market has become a 24/7 job; homes sell in the blink of an eye. Top agents are living a frenzied existence right now.
It is into this environment that a historic level of money aimed at changing the way people buy and sell homes has flowed. iBuying has opened up a completely new path for sellers. “Cash offer lenders” are rewiring the traditional home buying process. The two largest home search portals are moving from an advertising model to a referral fee model in which agents pay 30-40% for new business.
Things in the real estate agent and broker world right now are, in a word, intense.
HW: OK, so how do lenders looking to do better in the Realtor channel approach this reality?
BB: We’ve done hundreds of campaigns in this space and have conducted exhaustive research with real estate agents around the country, and if I had to distill those learnings into a couple basic truths they would be this:
First, being a real estate agent is a profoundly uncertain way of being. You wake up every morning without a paycheck to play in an overcrowded market shaped by externalities you can’t control. The job of the lender partner is to mitigate that uncertainty. Mortgage marketers that convincingly communicate that they can meet that core need, and demonstrate how they do that, win.
Second, most real estate agents are people people. And people people seek connection, especially in times like these. Much of the marketing we see from lenders doesn’t seem to get this fully. The messaging is flat, generic, impersonal and too focused on tech. Think about it this (admittedly cheesy) way: right now, real estate agents need a hug, not an app.
Lastly, agents (and also their brokers) have become pretty skeptical about marketing claims — justifiably so, in our opinion. They are inundated by pitches and promises from all kinds of potential partners or vendors and have been let down a lot. This puts an extra burden on the marketer and brand builder. There’s a lot of wariness out there.
HW: So what does a good lender brand or marketing campaign, or Realtor outreach program, look like then?
BB: The specifics will vary, of course, but at a high level it would take certain things into consideration.
Focus: We see too much broad-brush lender marketing in the real estate industry. It’s scattershot. More time should be taken on identifying the ideal target or targets. Is it the leader of an agent team at a virtual brokerage? A solo practitioner at a traditional “indie” brokerage? A tech native up-and-comer working online leads? There’s lots of profiles in this market, and they all have different needs, pain points and goals. A good campaign starts with a clear sense of who you’re speaking to.
Awareness: Generally speaking, people respond to marketing and advertising that reflects shared truths. In other words, from the marketer’s perspective, show them that you understand. Housing affordability is top of mind right now, and agents working with buyers are looking for any edge they can get in a hypercompetitive market. Speaking to that candidly opens the possibility for connection. So let’s say a lender went with a message something like this: “It’s brutal out there for you and your buyers — our strategy-minded LOs and broad suite of products can give you the edge that makes the difference.” It acknowledges reality, offers a solution and communicates understanding.
Difference: Pattern interruption is a powerful tool when everyone is pretty much doing the same thing. Most lender marketing Realtors see more or less looks and sounds the same. It’s important to ask yourself this: What can my brand say that no other brand is willing or able to say? Build from there. If you can’t gain attention, the rest of the marketing funnel doesn’t really matter.
HW: 1000watt does a lot of branding work. Talk to us about your perspective on how this practice applies in the mortgage business.
BB: There’s been a revolution of sorts in mortgage branding over the past few years. The shift to digital has driven some of this, and the rise of large non-bank, consumer-direct lenders with big marketing budgets and a brand-building mindset has also been at play. People are encountering mortgage brands that are warmer, more human, and place a greater emphasis on design. This is good to see, but there are lots of companies struggling to keep up with this shift.
Branding, in our view, is business. It’s an integral part of strategy, customer experience, and differentiation. That manifests in design, storytelling, and messaging. That’s what we do every day, so it’s good to see a greater awareness of the importance of branding in the mortgage industry.