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Why lenders should build a referral-based business

Human-assisted eCommerce is great for the loan officer’s referral business

HousingWire recently spoke with John G. Stevens, President at SRE.com, about the challenges mortgage loan officers and brokers face as the market continues to shift toward purchase money business and how human-assisted eCommerce can help them win more business.

HousingWire: Why should referrals be a key part of originators’ strategies?

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John G. Stevens: As the market heads into 2022, mortgage originators are going to need some good strategies to win more purchase money mortgage business because there just won’t be enough refi business to maintain the volume they have enjoyed over the past two years.

Nothing beats a good referral strategy because you are relying on a trusted go-between to introduce you to someone who needs you right now. People will always have more faith in what a friend or family member tells them about their past mortgage experience than they will in anything the lender has to say to them.

Competition is going to continue to heat up and loan officers who have cultivated good business referral relationships will have the chance to win more business and that can make all the difference.

HW: What challenges do originators face with regard to building referral relationships?

JGS: It’s very challenging to be in the right place at the right time. It can be even tougher to have someone else who isn’t in the business ready and able to refer business to you effectively when the need arises.

When someone is considering a new home purchase, they will generally reach out to a real estate agent for a lead on financing or talk to a trusted friend or relative. Good business referral relationships are important and they can help in the first case, but it’s very competitive because every loan officer is calling on them.

Far better to have the LO’s satisfied past customers make the referral. The big challenge here is that even if the customer loved the experience, it’s in the past now and they may not remember any of the details when they are asked about it, especially if the LO has been so busy closing new business that they haven’t stayed in touch.

Referral business has been a hit-or-miss proposition for many professional loan originators in the past. It won’t be next year, at least for those who hope to be successful.

HW: How can human-assisted eCommerce help with these concerns?

JGS: Human-assisted eCommerce, a term we coined at SRE to speak to the dual need for customer-facing technology and trusted human advisors, is great for the loan officer’s referral business for two reasons.

First, it puts all of the loan officer’s information online where the prospective borrower is going to go to pursue their home ownership dreams. Lenders can’t know when or where prospective borrowers will be in the real world when they decide to buy a new home, but we know they will be online and so we need to be there, too.

Second, it removes the burden from the LO’s satisfied customers of remembering to recommend them to friends and family when the need arises because their positive reviews will already be online, written when they were still experiencing the joy of their completed real estate transaction, and easy for their friends and family to find.

HW: How does SRE.com’s multi-solution platform better connect borrowers to the real estate professionals serving them?

JGS: We know that to put industry professionals and prospective mortgage borrowers together, we have to provide a wonderful place for that to happen. That’s why we’re spending millions of dollars to create SRE.com.

The old consumer-facing portals that lenders tried to use to attract new business failed because that’s not where consumers go to start the real estate buying process. They ask their Realtor or trusted friend or family member for a referral.

We know they go online, but primarily to look for their dream home. If you want to attract the borrowers of the future, you have to offer them the dream. While the site allows them to transact with both real estate sales professionals and mortgage loan officers, it’s not really about the transaction. It’s about the dream of homeownership and all of that comes with it.

SRE.com will be the online location for home buyers, sellers, real estate agents, mortgage originators and all of the other vendors that play a role in helping Americans make the most of their real estate investments. Loan officers who complete their free profiles on the site now will be well positioned to meet, interact and transact with these consumers.

Those that complete their profiles by the end of October can win one of FIVE free trips for two to Hawaii.

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