Bobby Stocks (CEO of Mortgage Engine) #1 Tip for lenders who want to scale their volume, and why understanding simple math can be a game changer.
Posted on Feb 24, 2018
Where a refinance lead can close immediately, it can take 3-6 months or more before a purchase lead is ready to close. Even if you take the application right away… How long before you actually see that Check?
It’s rare that mortgage companies stay in touch with the consumer for that long.
How persistent are most lenders?
A recent study conducted found only 21% of mortgage lenders attempted to call customers within 24 hours of the initial inquiry.
This is a very low rate that you can take advantage of with persistence!
It shows that few lenders have an organized, persistent sales approach in place which will make it easier for you to rise above the pack.
This is not always the lender's fault, they are busy, we get that.
Except people are looking to buy homes, so if you want to be the lender that closes the deal. Persistence pays.
From a Lead Gen Point of View:
Many lead generators have not been as enthusiastic about generating purchase leads because lenders have not been willing to follow up long enough or (more importantly) fast enough.
The cost of generating purchase leads is cheaper then the cost of generating refinance leads. Given this, it is difficult to justify for new home purchase buyers when return on investment is so much greater on a refinance ad…. Or so used to be the case.
Also, the same inventory of consumers means buying the same ad space for a lower selling product.
Purchase Leads are growing in value for mortgage companies. There are a number of reasons for this:
Mortgage rates are going up again!
As the Wall Street Journal reported at the beginning of April, as rates rise and refinance demand drops, capacity constraints on lenders will recede.
Banks will begin to compete for more purchase loans. The upturn in prices will boost lender confidence.
By the time rates increase again, many who qualified to refinance will have done so already, so it won’t make sense for those consumers to refinance again. It will be too late for everyone that wasn't in a loan – waiting for rates to drop! There will be fewer refinance prospects out there.
Methodology of successful lead generation companies has become highly sophisticated. Even so, it can be difficult to differentiate between a serious buyer and someone who’s simply browsing.
Good news is that some fb lead gen companies have cracked the code to lead generation follow up. Our own data pushed us to creating our own follow up software that increases the contact ratio of leads, and at the same time, decreases the amount of follow up calls needed to be made by the lender.
Lenders can put into place procedures to stay in touch with the consumer through the entire 6-12 month shopping/buying process.
This means immediate follow-up as well as continuing contact through the twelfth month with a consumer who’s still in the process of making decisions.
Here are some tips to follow
• Focus on a mix of buyer leads and Refi’s so that your 12 months sales projections have a good spread of investment. This allows you to confidently spend marketing dollars on purchase leads knowing they will return 10x over the next year.
• Divide loan officers into two teams: purchase and refinance. This workplace strategy will boost efficiency. You will increase conversion rates.
• Lenders working closely with real estate agents will increase positive contact with high value leads.
An infrastructure centered on continuing contact with potential buyers results in more closings. Persistence pays.
Bobby Stocks
Bobby has been creating marketing campaigns since the early 2000's and started generating leads using FB ads in 2012. His marketing agencies have worked in every industry. He has generated over 100,000 mortgage leads in just the last 24 months. Bobby's company now resides in beautiful Puerto Rico.
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