Saturday, February 14, 2009

Marketing Tips for Realtors

Marketing Success in Any Market
1. Define your client or target market?
There are many mortgage business sources, which require a loan originator to focus their efforts to improve their marketing response. That’s not to say you’re so focused you miss an opportunity. Marketing efforts often cost money, and having your marketing focused will improve your chances of attracting prospects. You should also focus on a source you have a passion for. When you have a true interest, it will show in your presentation.
A loan originator should have one main marketing focus, or target market, with two or three side sources. The target market is your main focus for marketing material and advertising. This source will need to be developed into your main source of generating production.
The side sources are generally relationship based and generally are a good source for stable reliable business. These sources feed you referral business. The benefit for this source is your professional handling of their client or referral. No one wants to make a recommendation that will cause them to hear the person complain or worse yet lose that person’s business themselves.
2. Review the 32 opportunities?
When you are first entering this industry, your sphere of influence starts with friends, family, and anyone you know enough to call and ask for business. These are also the best to make mistakes with while you learn the system and pitfalls of the mortgage business. People who already know you will be more patient with mistakes, and you can learn how to handle the issues without someone yelling at you (hopefully). You will need to be sensitive to the confidentiality of the information you will learn and gain their trust.
The other markets are your choice. Real estate agents are not suggested when first starting out, as this group will be the least forgiving, as real estate agents have a tendency to not forget the botched closing that cost them their commission.
The list is not all-inclusive, so don’t be afraid to look outside this list.
‘3′ FOOT RULE - Be sure to give everyone that comes within three foot of you your card. Give it to everyone you tip, or meet. Have your card in an easy to access clean place so you can get to them quickly. Do not pass out damaged or dirty cards as that would reflect poorly on your professionalism.
BANKS/CREDIT UNIONS - Many Banks and Credit Unions are limited in their home loan programs, which allow for referrals. Reciprocate by referring people that need car loans or other types of loans you do not offer. A reciprocal agreement for services is great networking.
BUILDER ACCOUNTS - It may be hard to get the account of the big builders, but smaller custom builder accounts may be open to a professional mortgage person. Builders are special in that they will have specific demands, and the builder becomes your client over the borrower. Weekly status reports and constant availability and reliability are a must. This type of client is very demanding in that they expect perfection with little room for mistakes, and are very critical of the amount of income they will allow you to make on a loan. The benefit is the business is reliable and consistent, until the subdivision is sold out. It takes six to twelve months for the property to close, but when you are in the builder’s flow of business, the closings are reliable which allows you to charge fewer fees. The builder is also doing your marketing, as they are the ones recommending you for the loan on the new property.
CLUBS or ORGANIZATIONS - Join. People like to work with people they know even if indirectly through club affiliation. If they have a newsletter, get your business information in the newsletter some how or write an article. Sponsorship can also help you get your name out to the members. Don’t forget the ‘3′ foot rule. Chamber of Commerce may be effective if you can get on the committee to welcome newcomers to the area.
COLD CALLS - Practice makes perfect with cold calling. The more calls you make the more confident you will become. In your presentation, have a script that identifies the benefit points for your target market, and remember you are trying to qualify the prospect to determine if they will be worth bringing in for an appointment. The mind set is you have to hear ‘no’s’ to get the ‘yes’.
When cold calling a real estate agent, have your benefit for real estate agent presentation ready and your response to ‘I have a lender I use already’. Make this response sincere with the true benefit to your potential new client.
COLLEGE STUDENTS - College students may be a good market as they may get an FHA loan when parents can qualify for their new home purchase. Parents can benefit by purchasing a home for their college student, instead of paying for dorm fees. After the student graduates, they can sell the home. Possibly the equity growth can cover the cost of the student loans. Check FHA or other loan program guidelines for loans with this feature.
COMMUNITY COLLEGES - Try teaming up with an adult education instructor in Real Estate, Finance, etc… that would welcome a mortgage professional to do a short presentation on something applicable to their class or current market - great free advertising.
CONTRACTORS - Home repair specialist often need financing for the improvements or repairs they are proposing to the homeowner. When house prices are raising this is a good market as homeowners decide to improve their current home instead of moving up. Give the contractor flyers or brochure they can pass to their homeowners. The flyers will need to identify the
benefits of 1st or 2nd mortgages for home improvements. Major improvements of ‘fair condition’ properties may need an FHA 203k rehabilitation loan or FNMA Renovation type programs.
CONVENTION or SEMINAR ATTENDEES - You can get lists of attendees to real estate home tours, home shows, garden shows, etc… You may need to pay and attend the seminar yourself to get access to the list. Do a mailer to solicit their business, as well as at the convention.
COURTHOUSE RECORDS, FEDERAL & STATE TAX LIENS - Go to the county Recorder’s Office, Federal Courthouse, or County tax collector and get the name of everyone with Federal, State, or County tax liens. County property taxes are best as generally this ensures they own property. Mail an offer to refinance their home to pay off the liens.
CUSTOM CONSTRUCTION/ARCHITECT - Team up with a builder to develop seminars that educate the consumer on ‘How to build their Dream Home’. Custom construction and architects have unique problems with the size of the loan amount. Limited lenders will do big jumbo loan amounts, so ensure you have a lending source.
DEAD LOAN FILE - Going through the cancelled loans “dead loan” files in your office can generate business. Guidelines and programs change, and new products become available. Get permission from your manager before attempting.
FACTORY or PLANT POSTER BOARD - Go to a large factory or assembly plant, and ask the human resource department if you can put a “Still Renting?” or “Need to Consolidate Your Bills?” poster on their bulletin board. Explain to them how you can help their employees. Your ‘angle’ with HR is that a homeowner makes a better employee and may be a more stable worker. Also, an employee who is not worrying about paying their bills does a better job at work, and has no wage garnishments. Offer discount loan fees for employees. Placement near the time clock or in the break room works great. An insert in their pay envelope works well too. Make sure the action for the employee is clear and easy to follow, such as an easy phone number to remember or tear off sheets with the number to call.
FARM LEADS - Farm leads are a list of potential borrower that you telemarketer to or do mass mail marketing campaigns. If telemarketing, have a scripted approach. Most title companies will give you a qualified list free in exchange for you using their office services when doing a refinance loan. Farm leads will target an area specified by the parameters you set. common parameters are loans closed two years ago (gets you the non-prime 2/28 programs, and possible equity built up in the home for cash out); home prices between $150,000 and $250,000 (or whatever range you prefer such as within FHA loan limits); and zip code parameters. Work with your title company rep for all the details available and try to get a list that will reach your chosen target market. Farm lists for renters may also be available. Always remember to ‘scrub’ the list, remove “Do Not Call’ registered numbers.
FLOOR DUTY - The Company you work for may do advertising. Floor duty is when the prospect calls are coming in to the company from their advertising. Floor duty allows you to handle the incoming sales calls. Luck of the draw on this one, but morning is usually the best as people will generally take care of important issues like buying a home first thing in the morning.
FOR SALE BY OWNERS - Teach them how to sell their own home. Sell how you can qualify the borrower, and get them their financing. Open house kits (explained later in this section) can also be used for this market.
HOME BUYER SEMINARS - develop a seminar to educate first-time home buyers on how the mortgage lending process works, and what to expect. Mortgage Trainers of North America has a Home Buyer Seminar already complete for your use. For more information and the cost, check the website After the seminar, invite the attendees for a quick prequalification.
JUST CLOSED REAL ESTATE - Get a farm list or county recorders records of recently closed loans from a specific area or price range. Solicit these leads for 100% and 125% LTV second mortgage programs for home improvement. Many new buyers have improvement projects or yards to complete.
KIOSK - These stands in the Malls can be effective ways to meet people. Placement would depend on your target market and where they are likely to shop. If you have a wireless laptop computer, you could do quick pre-quals on the spot.
MARKET TRENDS - Catch the Wave - Look for trends in the market or new hot product offerings. Title companies may offer a newsletter service that can keep you informed of market trends along with information on local house sales prices statistics. Watch the trends of hot products with wholesale lender flyers or go to the lender’s web sites. Set your target market based on who will benefit from the new hot product offering. Here are some examples of trends.
When house prices soar, start a campaign to remodel their current home to make it what they want. Many homeowners will not be able to move, as the price of a better house will be outside their budget. Therefore they will choose to do a ‘cash out’ refinance or Home Equity Line of Credit (HELOC) to cover the costs of remodeling or room addition projects. Teaming up with a contractor (make sure they are licensed) can help reach these borrowers.
When the economy slows, farm your past clients for leads. Market for debt consolidation loans is very helpful for people with heavy debt burdens. January is always a good month for debt consolidation loans as people want to payoff last years and holiday debts. January through April is good for new home buyers with income tax refund money.
June is a big wedding month, so hook up with a bridal shop to offer free home buyer qualification. Set up a Kiosk in a mall during the spring outside a bridal shop, or set up a table inside a bridal shop. Many wedding couples get thousands for their new start. They in turn may want to purchase a home. Many will even close on the house before the wedding, so this marketing campaign for wedding planners can be offered all year long.
Sometimes the easiest approach to marketing can be to jump on the wave of business and ride it. Look to see what the hot new markets are, and focus your efforts on that business. Option Arm programs were the last market trend. What is the trend today? It’s important to pay attention to trends. When the market moves, if you’re not watching the industry indicators, reading the industry magazines, newsletters, etc… you could miss an opportunity.
MEDICAL PROFESSIONALS, FIREMEN, POLICE OFFICERS, OR TEACHERS - There are special programs available for professionals in your community. FNMA and FHLMC both have high LTV programs. Get details of the loan programs on their websites. You can find links at These programs allow for less down payment or down payment assistance programs. When approaching this market, advertise in areas these professionals would read or circulate. Professionals are use to making referrals to their friends and collages, so be sure to ask for referrals.
MILITARY PERSONNEL - Present the benefits you can do for military people. Promote “free pre-qualifications” or “zero down financing” to compete with VA loans. When National Guardsmen are called to active duty, they will generally get eligibility for VA home loans. This is unique to war times, and a good niche to sale when VA loans are available to you.
OPEN HOUSE - Real estate agents may want for safety reasons, to have someone sit with them during an open house. Beyond safety reasons, having the ability to qualify any potential buyers there on the spot is a plus. Here is an opportunity to meet a potential new client who is in the market to purchase a property. You could pull their credit and interview them on the spot. If they do not purchase the property, maybe they will purchase another property.
Open house kits can be prepared in advance. The kit gives the person two or three scenarios on payments, down payment requirements, qualifying income needs, house amenities or special features list. Open house kits can also include information on nearby amenities such as schools, popular stores, local highlights of interest, chamber information, and other information useful to a potential purchaser for the home.
You could drop-in to an Open House, and talk to the real estate agent. Open houses don’t have a ‘gate keeper’ like the real estate office. Treat as you would a cold call. If agent is not busy, it’s a good time to pitch your services.
PROFESSIONAL CONTACTS - Bankruptcy attorney, financial consultants, divorce attorney, CPA or Bookkeeper, and other professionals that work with clients that need the equity of their home or understand the value of home ownership. These professionals need a qualified mortgage professional to refer their clients. A financial planner may want a homeowner to refinance and use the equity for investments with higher rate of return. An accountant may advise a client they need to purchase a home for the tax write off. Bankruptcy attorney may advise a different path from bankruptcy. Such as a debt consolidation when a client has excessive home equity, or paying off the chapter 13 bankruptcies early with a home equity refinance.
PUBLIC INFORMATION SOURCES - There are public announcements for marriage licenses, job promotions, bankruptcy filings, divorce filings, or other filings that would give you a reason for approach.
REAL ESTATE AGENTS - The goal of having a steady stream of real estate agent business is the dream of most loan originators. The relationship between the real estate agent and loan originator is difficult to keep consistent. Often the relationship is only as good as the last loan transaction. Real estate agents have many loan originators contending for their business, all offering better products, better service, and who knows what. Keep in mind that it is illegal according to RESPA to pay a real estate agent for a lead.
So if you cannot buy the real estate agent’s loyalty how do you keep the relationship? Excellent customer service is the best way. Don’t miss a close of escrow date, EVER! Keep the real estate agent informed with weekly status reports. Communication is Key! Keep in mind the Privacy Laws governs your actions as to the amount of information you may share with the real estate agents involved in the transaction.
Listing Agents - When you have a purchase transaction, keep the listing agent well informed, as this is an opportunity for a new source. By keeping them in the information loop, you may just earn their business. Introduce yourself when you get the purchase contract. Let them know when the appraisal is being ordered and ask how they want to give access to the property. Call and inform them when the appraisal is received and the appraised value, and when closing docs are ordered and at title. After you call the listing agent to let them know the transaction has funded, let them know you’d like to work with them. Give them your quick scripted presentation for new business, and ask for an appointment to discuss how you can help them close loans. Maybe show them the ‘Open House Kits’ you use for listing agents, and your willingness to sit at open houses.
Real estate agents can give referrals to other real estate agents and purchasers, but only if they trust you to get the loan closed. Best way to get past the ‘Gate Keeper’. Ask the agents for referrals to other agents in their office. Meet the real estate agent at their office so they can introduce you around to the other agents personally.
REAL ESTATE INVESTOR - Develop a seminar educating consumers on how to use the equity in their current properties to buy more properties. Some companies may even go further by lining up renters with a leasing agent for their investment property clients.
RECENT COLLEGE GRADUATES - Get lists of all college graduates from your local colleges and vocational-tech schools. These people often have just gotten new jobs, received graduation money, and may be looking to purchase a home or condo.
REFERRALS - This is the key to success. This is the best source of business for any business. A warm lead to call, and repeat customers keep the commissions stable more than any other source of business. Just doing a good job may not generate a referral. Marketing follow up systems work well to stimulate referrals. If you feel you deserve the business, ASK FOR IT! Give the borrower many opportunities to give you referrals, ask often, and give them more than one card so they can pass them out. You don’t want to be pushy, but asking politely is expected. Some top producers operate on a “By Referral Only” basis. Once the flow of referrals start you may never have to worry about where your business is coming from, even in hard times.
RENTERS - This market can have different approaches, such as rent vs. purchase argument. Solicit the rental market and educate them on the cost of not purchasing a home. A large percentage of the current renters, do not believe they will qualify. They may not know how much money it takes, or whether they have good credit or not. They are afraid to purchase, as their parents were renters, and they truly feel home ownership is for someone else. How can you tap this market and let them know they may qualify? Target the renters with new home buying seminars, or mail campaign to apartment complexes telling them “Renting is Hazardous to Your Wealth”.
REVERSE MORTGAGE MARKET - Solicit retirees that have equity or free and clear properties. Reverse mortgages is a niche as not everyone will want this type of loan. But, for those elderly homeowners, it can be a great relief of extra money for medical expenses. This may also be the next wave of business, as the ‘Baby Boomer’ generation turns 62 this year.
WEB SEARCH ENGINES - Once you have a website, you can purchase services from search engines to drive business to your site. Prices vary for this service and are called website optimization. There are ways to make your web site rank high in the search engines without paying for a service. You will need to do your homework to learn how to use key words in your home page that will give your site priority consideration with search engines.
IDENTIFY YOUR TARGET MARKETYour first step is to identify who you want to have as a client or target market. What are your strong points or personal desires? If you like working with first time homebuyers and overcoming their challenges, then this can be your target market. Pick a target market that you understand their true needs and desires, or research to find out what they need. Maybe you remember your first experience in buying a home, and feel you could do better with communication to the buyer on the expectations of the process. Put your mind set in the new first-time homebuyers mind, and determine what issues and fears they may have. Make a list of first-time homebuyer concerns and possible issues. Then work on the loan features and benefits to assist with these issues.
Setting production goals are a great start in making a marketing plan. Preparing goals for your market approach saves time and frustration. If you don’t have goals sheets for planning your marketing approach, you may access free Sales Goal Sheet Templates at Goals allow you to focus your efforts and budget.
4. REACHING YOUR MARKETYour budget may determine your approach? Build into every client transaction a percentage of income for the marketing budget. Marketing does not have to be expensive or time consuming. Referrals are the cheapest as they generally just take an effort to ask for the referral, and then follow up with the lead. It is also courteous to send a thank you for the lead received. Due to privacy rights, you cannot disclose any details of the referrals business. Follow the laws required in your state and federal advertising regulations, and focus your presentation on your target market. Do not attempt the ‘shot gun’ approach that attempt to hit every prospective borrower. Your message will be lost in the maze of information. Also your advertising should not deter protected groups from accessing your services. Keep in mind that generally your first approach to any market is to get them to ‘call you’. So that is your focus.
BROCHURES – These can be nice for hand outs, and make the company look more professional with a brochure that outlines their services. Professional services and templates on the internet can help with development. When approaching professionals and human resource departments, a brochure works well to let them know the benefits of using you, your service, and your company. Benefits outlined in the brochure will need to be for your target market, and again not the shot gun approach of everything you have ever done. E-MAIL MARKETING CAMPAIGN – Although there are costs and work involved in setting up an e-mail marketing campaign, there are clear benefits. You can purchase a data base if you do not have one, but the norm is to be invited to use someone’s email. The point is that once you get started, you will find e-mailing to be cost-effective.
FLYERS – Do not make a flyer that will attract all possible prospects. Do not let the flyer become too busy or misleading. The flyers should have a message that will meet the marketing goal, generally to generate action by the targeted market. The flyer will need to hit on the estimated motivation of the target market. What specific services will the potential borrower want from you, the mortgage professional?
GIFTS – There are gift baskets, wine with customized company name labels, plants, seed packets, fruit baskets, new home welcome baskets, and many other ways to spend your marketing dollars. There are also regulations on gifts from people in the mortgage business, so keep gifts under $50. If you give a present to one client, you should give a present to all. Excessive or expected gifts may be considered an illegal inducement or referral fee.
MAILING CAMPAIGN – There are costs involved in this approach, and the return is estimated at 2-3% being a good response. There are marketing services for a fee that will handle the mailing for you. These services make mailing campaigns easy as long as your database is up-to-date and accurate. Data bases can be purchased, but may not be current or may be over-used by other loan originators. Farm lists from title companies can also be used for your data base. What type of mailer will you use?
POSTCARDS – An effective mailer as most people will read the postcard before they throw. Postcards also cost less to mail. You have a very brief area to get your target market to take action, so make sure the message is simple and action requesting is clear. Call me!
GREETING CARDS – Holiday cards, birthday cards, and thank you's are all great to keep in touch with past clients. It also gives you another chance to ask for referrals, keep your data base current, and just basically keep your name in the fore front of their mind.
INVITATION – Invite past and potential clients to special events, “Homebuyer Seminar”, open house at your office, or holiday party. Have a door prize (less than $50 in value). Your client will get one chance in the drawing for every person they bring. How about a welcome to the neighborhood party you throw for your new client and their neighbors.
NEWSLETTERS – Newsletters can maintain communication between you and your clients. Marketing service companies can develop a newsletter for you, or you can write them yourself. Keep in mind that most newsletters are informational and do not normally ask for the business like marketing material.
NEWSPAPER/MAGAZINE PRINT-ADS – These can be expensive, but if your target market reads the paper or magazine the cost may be off set by the amount of applications it generates. Ask for a Media Kit to determine circulation and demographics of their readers. Ads should not be too busy. Keep it simple as you are just trying to get the phone to ring. Sometimes doing the ad in black with white writing can help it stand out from the other newspaper print ads.
PROMOTIONAL ITEMS – Pens, calendars, pads, rulers, game schedule charts, magnets, key chains, go more for useful rather than unique although both are great. Recipe cards are unique and often kept. T-shirts, polo shirts, hats, and bags are nice, but can be expensive and are considered inducements which are illegal. Why are you giving them the promotional item? The answer may help you decide what to use, if anything.
RADIO ADVERTISEMENT – Radio advertising on your local station is not too expensive, especially sponsoring the weather or traffic reports. You’ll need to run the ad at least six months. What radio station will your target market listen too? What time?
FREE ADVERTISING – there are many sources of free advertising. The following is a small list:
Word of mouth, referrals is the best.
Newspaper article written about you, or a press release.
Speeches and programs for civic groups.
Teach a course on home financing at the community college.
Business card on bulletin boards at stores and community centers.
Write newspaper article or column
Speak at Real Estate meetings.
Speak at high school career day programs
Three foot rule, anyone within three feet gets your card and presentation.
What more can you think of?
5. CHOOSING YOUR APPROACHNext Step is to determine what form of advertising you will use to reach your market. What approach will give you the best possibility of reaching this target market? The first approach may not work initially. Repetitive advertising is ideal as people will normally need to see something three or more times before they act. Maybe do a repeating ad in the paper, or radio. Send a mailer more than once. The ad or mailer can vary each time, but keep the heading or company logo or slogan so they can recognize the advertisement. Plan out your marketing for the year or at least six months, then track your responses and fine tune your campaign as you go.

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