Despite rising home prices and a supply crunch, the purchase market is still wildly hot. In light of that, HousingWire sat down with Peter Paglia, Chief Strategy Officer at HomeBinder, to discuss how to create a “Client for Life” in this environment.
HousingWire: As the refi boom simmers down, why should lenders focus on creating clients for life?
Peter Paglia: The Mortgage Bankers Association (MBA) predicts purchase volume will set a new record in 2021, hitting $1.67 trillion for a projected growth of 16.4%. Setting purchase borrowers up to be clients for life creates a competitive edge that will help capture market share as refinance volume slows. Lenders are well aware of the fact that switching from a refinance-driven market to a purchase-driven one requires meaningful differentiation. The brilliance of HomeBinder’s client for life approach is that it fully engages real estate agents as well. As the industry migrates to focusing on purchase volume, originators will look to rekindle their relationships with key real estate agents. HomeBinder offers a new innovative tool for the real estate agent as well. This means originators have a differentiator that is compelling for both the homebuyer and the real estate agent, so it actually creates a double win.
HW: What are some actionable ways they can do so?
PP: Creating a genuine client for life requires consistent and compelling engagement throughout the journey of homeownership. This is not a simple proposition in today’s volatile environment where we are not only still grappling with the remnants of the pandemic and concerns over future impact, but are also faced with a rapidly changing borrower demographic. Today’s homebuyer expects immediate, yet personalized, communication that is available on any device 24/7. Having the capacity to reach out to prospective homebuyers in a manner that meets these expectations is a necessity. The originator’s call to action, therefore, involves a proactive, innovative approach to building relationships that delivers a long-term personalized form of engagement, HomeBinder.
HW: What are the key challenges lenders face when it comes to forming lasting customer relationships?
PP: One of the pivotal obstacles to forming borrower relationships with duration is prioritization. Despite intensive efforts by the industry to move to more customer-centric business approaches, including mandates by the Consumer Financial Protection Bureau (CFPB) requiring lenders to ensure consumer protection, industry efforts to serve the customer often wind up on the back burner. Not for lack of effort, however, resource restrictions, regulatory burden, and rapidly evolving technology, not to mention pandemic impact, often take precedence. This conundrum frequently results in the purchase of large platform automation that in the end typically delivers watered-down, generic forms of engagement and access to information, providing little and diminishing value over time to the homebuyer.
HW: How does HomeBinder help lenders establish Clients for Life?
PP: HomeBinder provides a centralized and automated home management platform designed for the journey of homeownership. Delivering valuable information and actionable events that repetitively engage the homeowner, HomeBinder enables an ongoing relationship with the client that naturally evolves without requiring minimal intervention from the lender. The platform itself is branded to the lender yet remains available through the life of the property, fostering significant longevity that keeps the lender top of mind. Additionally, HomeBinder creates a unique collaboration amongst the various professionals that regularly interact with homebuyers, from the real estate agent to the home inspector, to the home insurer and beyond.
The HomeBinder platform is only available from the lender or other industry providers, creating a sense of exclusivity. The homebuyer receives the binder in the form of a gift, offering robust maintenance and home valuation tools that are event-driven and informative. They are able to digitally store household documents, have access to information and actions on how and when to maintain areas of the home, as well as search for trusted professionals referred by authorized partners or other homeowners in their local area. With proven technology and an offering that is highly relevant for today’s homeowner, HomeBinder legitimately creates a valuable client for life.