Cultivating the loan officer and real estate agent relationship

Proactive outreach is great, but providing value is crucial for loan officers connecting with real estate agents.

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It’s no secret that real estate agents are an important stakeholder in the lending process. As a result, a strong relationship between loan officers and real estate agents can deliver many benefits.

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First and foremost, they can help loan officers win more business. In fact, in a recent survey, almost all (96%) top loan officers said that real estate agents are their best source of origination referrals, putting them way ahead of other stakeholders such as financial advisors (43%), builders (15%), and lawyers (12%). These referred customers are incredibly valuable, since they have a 30% higher conversion rate.

Strong relationships between LOs and real estate agents can also help deliver a better customer experience. When the real estate agent and loan officer communicate well from the start, then the experience gets better for everyone.

According to McKinsey, the most important factor in first-time home buyers’ decisions to choose a lender was learning — either through online reviews or word of mouth — that they delivered an exceptional customer experience.

By forming an alliance with a real estate agent, who can recommend your services, loan officers can start in a great position and win customer trust early on.

How to build real estate agent relationships: Top do’s and don’ts

Do: Connect with your community

Being visible in the community helps others remember your services when it matters. Loan closings, training events, and conferences are all good places to start. In fact, over half (53%) of top loan officers attend at least one closing per week.

“I go [to closings] one time per week because I believe it’s very important,” said a loan officer contributing to MGIC’s 2021 survey “It allows you to spend 30-60 minutes in front of the real estate agent who can become a referral partner.”

Don’t: Waste their time

Don’t turn up at an open house pretending to be a buyer, it will only hamper a potential relationship with the real estate agent. Instead, be honest about your role and goals. Reach out to real estate agents and offer to help them host their open house. Consider providing snacks or refreshments, or even inviting potential buyers from your network.

Do: Be proactive and responsive

The vast majority of real estate agents (nearly 80%) value efficient communication and responsiveness ahead of anything else, including rates. And the top LOs stay in touch with real estate agents on a regular basis, with over 60% saying they connect multiple times a week.

Don’t: Be too pushy

There’s a line between being proactive and responsive, and being far too pushy — especially when not under contract. Assess the responses you’re receiving to work out where that line is.

Do: Find ways to provide value

Real estate agents have busy lives. In fact, 80% say that managing their pipeline takes up most of their time, with receiving documentation stated as one of the biggest causes of delays. Find a way to help them be more efficient and you can become invaluable.

Showcase differentiators that can benefit the real estate agent. If you have a unique product offering, or a particularly special rate, then make it known. Other differentiators include exceptional customer service, easy-to-use digital tools, and streamlined application experiences that facilitate faster loans.

Loan officers can also deliver value by referring your own customers to real estate agents. Recognizing that the best relationships are symbiotic, the vast majority (81%) of top loan officers make referrals to earn referrals.

Don’t: Be dishonest

Don’t oversell with promises you simply cannot keep. Make sure your referrals and differentiators are honest and deliverable, and own up quickly after any mistakes. It’s the smoothest path to earning more trust.

Start as you mean to go on

There’s no one-size-fits-all approach when it comes to creating effective relationships between loan officers and real estate agents, but if you can work hard at cultivating a real partnership then you are more likely to be rewarded.

Get it right and loan officers can achieve not only a steady stream of reliable referrals, but also an improved borrower experience. With a strong foundation of real estate agent relationships, loan officers can scale success and achieve profitable growth long into the future.