A friend and I were discussing our jobs over lunch last week. I mentioned that I was working with Amy, a recent college-graduate who wanted to buy her first home rather than continue to pay rent. He nodded when I said it was going to be a lot of work guiding her through the process. But then he said, “But you’ve done this before. Don’t you get a lot of referrals from these first-time home buyers?”
“Time and patience pays off with years of referrals”
It’s true. First-time homebuyers have become my bread-and-butter, so to speak. Amy was referred to me by her friend Matt, who I helped through the home-buying process earlier this year.
Here’s generally what’s involved in successfully selling a home to a first-time homebuyer:
Time and patience.
I spend a lot of time explaining the process. We look at a lot of houses! But all the time we spend together makes for a good experience for them. And that eventually pays off in more referrals for me.
It’s not about the money.
Amy told me that she started her house hunt by clicking on the “More Info” buttons on properties listed on Zillow. Within 2 minutes, she would get a call from a real estate agent.
Every time she clicked, she got a lunch date. She got a lot of lunches, but it was clear that those agents were not interested in her home search. They were looking to sell bigger properties than she could afford.
If this job were all about the money, believe me, I would be selling as many lake houses as I could get! But the more people I help to buy a home – no matter what the price – the more referrals I get. And as you can see from Amy’s experience, buyers know right away if that’s all you’re about.
Challenge them.
Ask these new house hunters exactly what they are looking for in a home. Privacy? Air-conditioning? Ten acres of yard?
They are all watching those shows on TV, and they have NO IDEA how houses work, especially the 100-year-old homes we have in our area. They are interested in granite countertops and gray walls and shiplap. I ask them if they are handy and can they handle all the repairs an older home may require. Are they ready for a fixer-upper? If not, do they realize that a completely remodeled home is going to cost more?
Require preapprovals.
Many new homebuyers think they can just meet at the house and then decide to put in an offer. But we have low inventories across our state – I’m sure this is true across the country. They often have 24-hours or less to make an offer, so they have to be ready to go with a preapproval letter in a package that shows they are serious.
Provide a list of lenders.
Speaking of preapprovals, my realty company, Blu House Properties, maintains a list of approved lenders for those homebuyers who ask. How does a lender get on that list?
- They over-communicate. Everyone is so busy with so many deals that it’s easy for a buyer to feel lost in the shuffle. Our company looks for loan officers who stay in touch with a buyer 3 to 4 times a week.
- They set expectations. Again, first-time homebuyers are clueless about the process, so they need to know exactly what is going to happen, when it’s going to happen and why.
- They demonstrate flexibility. First-time homebuyers are usually not going to fit into a certain loan program. Blu House Properties looks for lenders who are willing to be creative and look for financing options for these borrowers.
Stay in touch.
Amy successfully closed on her home in June. Once she moved in, she was in touch with me shortly after that because she needed an electrician.
We keep a list of dependable contractors, from roofers to landscapers to electricians to HVAC specialists. We want our homebuyers to be successful homeowners, so anything we can do to help, we will. Plus, it’s a great way to stay in touch and keep those referrals coming.
One more thing.
As you can see, I work hard for my leads! Lenders ask me for referrals daily. Leads go to lenders who:
- Establish an ongoing relationship. I’m not going to redirect a lead from my established sources – where we’ve been sending each other leads for years – just because you want it.
- Demonstrate commitment to our industry. One loan officer committed to attend every Realtor® event that had more than 50 people attend it, whether it was a happy hour or a continuing education class. He always showed up, and he always walked away with at least 1 or 2 leads.
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The opinions and insights expressed in this blog are solely those of its author, Daniel Steffee, and do not necessarily represent the views of either Mortgage Guaranty Insurance Corporation or any of its parent, affiliates, or subsidiaries (collectively, “MGIC”). Neither MGIC nor any of its officers, directors, employees or agents makes any representations or warranties of any kind regarding the soundness, reliability, accuracy or completeness of any opinion, insight, recommendation, data, or other information contained in this blog, or its suitability for any intended purpose."
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