Realtors Drive the Mortgage Bus
Contrary to popular belief, the most instrumental people in the mortgage industry do not work at the Federal Reserve Bank, they are not lawmakers or regulators, they do not work on Wall Street, they are not even mortgage people. The people who have the ability to make lenders bend over backwards for them are in fact Realtors. For Realtors, lenders go into a frenzy to deliver the terms of a coveted purchase contract, in the pursuit of buyer referrals. Why? This purchase mortgage business tops every lenders list of priorities, even when rates are low and money is tight, lenders know that purchase business means resilience. Realtors are the ones who hold the key to this success, they source the buyers, they sell the homes, it’s their ball, they make the rules.
One would think that the internet would have taken over this gatekeeper role, but nothing can be farther from the truth. With an in-house lender representative in almost every real estate office, on-site courting agents and buyers, Realtor referred purchase business is booming. These representatives pitch Realtors at open houses, through real estate boards, at conventions, via e-mail, even good old face-to-face in person sales calls.
While the home buying process usually begins on the internet, it is in the client-Realtor relationship where trust and expertise are established and nurtured. The Realtor is the one clients trust and because of this, the one they listen to when it comes to related issues. Realtors keep the business of attorneys, home inspectors, mortgage lenders and others alive by referrals. The ever-sought after referral is the prize they receive for esteemed performance or long standing positioning in the marketplace, the referral can be induced from a financial relationship between a service provider and a Realtor and it is the driving force behind all subtle and not so subtle marketing initiatives in whatever form they may take. Purchase business generates fee income for attorneys, home inspectors, appraisers, movers and lenders, and the rush to capture that business is fierce.
Once upon a time, Realtors could get a mortgage rep to deliver a mortgage of some form or another in almost any circumstance almost instantly! If a borrower was not qualified, the Realtor would do whatever it took to get the deal closed. Mortgage reps were coveted by their ability and their willingness to put people into mortgage loans that fit poorly, but got the job done. And then came the great mortgage meltdown of 2007 and 2008. This crash brought in an abundance of new regulations and consumer protection measures in an effort to bring order to the chaos that was the mortgage business. In this new, confusing mortgage consumer staging platform, these measures and regulations boasted too much information in what sometimes seemed like Egyptian hieroglyphics and lawmakers mandated more clarity and consideration.
Realtors use condensed mortgage approval/commitment periods and lightning-quick closings as tools to win bidding wars. Lenders that deliver the fastest turnaround times by skillfully navigating the new consumer protection measures will come out on top to win Realtor purchase referrals, because Realtors are the hold the key, they drive the bus, they want it done now.