Times, markets and technology all change, but consumer objections surrounding major purchases like homes seem to stay basically the same. Responses from industry professionals to a survey by Genworth Mortgage Insurance at the recent Mortgage Bankers Association Secondary Conference won't likely come as a surprise to most MLOs and Realtors:
- Knowledge Gap: 39% said a lack of general knowledge of the home buying process is responsible for first-time home buyer hesitation, and 28% said borrowers believe a down payment of 20% is required.
- Misconceptions: 41% said borrowers who know it's possible to buy a home with less than 20% down believe it's very difficult to do so.
- Financial Issues/Insecurities: 27% said excessive student loan debt keeps people from exploring homeownership.
- Supply: 28% said lack of inventory is holding potential buyers back.
There are two solutions for all four of the issues identified in the Genworth survey: education and engagement.
Overcoming Homebuying Objections Through Education and Engagement
The well-intentioned concept of educating consumers in an effort to convert them to customers is noble on the surface. However, the idea has become trite due to incomplete or poor execution. Today's potential homebuyers have so much information at their fingertips that dated, lackluster approaches to consumer education offered up by sales professionals hoping to do business with them are likely to create the exact opposite of the desired result.
Do the mortgage marketing tools you're using address the issues revealed in the Genworth survey? Audit all the marketing tools you're using from your automated campaigns to co-marketing collateral such as open house marketing flyers and lead follow-up methods and materials. Don't forget to review newsletters and other outreach you deploy at regular intervals.
Do your messages and materials address current marketing events and capture consumers' attention by communicating possibility and illustrating solutions? A great example of this would be to make sure open house marketing flyers have down payment options prominently displayed, noting the home can be purchased with the smallest down payment programs available. Payment scenarios with different interest rates are also helpful to ignite urgency in buyers. Mortgage loan officers should research the listings of their current referral partners and new Realtors and teams they'd like to work with, and provide this information for open house marketing and other prospect outreach for use in all co-marketing efforts.
Effective buyer education can eliminate knowledge gaps, clear up misconceptions and allay fears associated with finances and the ability to qualify for a mortgage.
The most successful MLOs are always educating - from the time they begin interacting with a prospect and for years after closing. Automated mortgage marketing tools may help you start the education process, but leads don't become clients and referrals don't happen without consistent, concerted engagement. Many MLOs and Realtors aren't reaching their lead conversion potential because of the length of the sales cycle, so the first aspect of engagement is to have a plan and a manageable way to execute the organization, oversight and follow-up with your leads. Excellent marketing tools aren't helpful if people are forgotten or relegated to the "dead lead pile" too soon. Learn tips on how to resurrect dead leads from Joe Welu, Total Expert Founder and CEO.
It's common for consumers to contact a lending or real estate professional long before they actually transact, so make sure you have a "long game" not only for leads, but your past clients and sphere of influence. Automation helps, but content is also critical. Use the following guidelines to choose and deploy touches that get results:
- Lead phase: You can't have too many high-quality campaigns for leads from the web, partners and other sources. As long as they don't opt out, keep cycling your leads through campaigns that familiarize them with the process, market and you.
- Milestones: Keep the education going - and your clients calm - with updates, explanations of the different aspects of the process and reminders you're there to help.
- Immediate post close: Give your customers a useful toolkit to make the most of their new homeownership status. Information on homesteading, payment coupons and tax documentation are just a few things they may forget about in the excitement and moving mayhem.
- Sphere of influence, past clients, other contacts: Provide relevant, current event-based information that clearly communicates what the news means to the consumer and what actions they should take to use and benefit from it.
While great business plans and mortgage marketing tools can't overcome lack of inventory, they can lead consumers to get the professional help that will help them succeed no matter how tight the market is. MLOs and Realtors know that getting pre-approved and having access to up-to-date MLS data will help them find property faster and be more competitive, but that's not widely understood in the general public.
Just as many people mistakenly believe that it takes 20% down to buy a home, a vast majority don't understand the real value of professional representation. Imparting this knowledge in an interesting, appealing way will build trust and your business.