Winning with Finance

Lynne Holcomb (Help-U-Sell Cape Coral) came up to Sarasota yesterday for the Florida rally.  She’s a 20 year member of the Help-U-Sell team and has always been a strong player and participant.   Early in the day,  one of the Bank of America representatives went through the Alliance program we have with them.  She showed us a place in the BAC mortgage center website where a borrower can input their income and expenses and get down to a real ratio driven picture of their financial capabilities.  It was really quite remarkable and sparked a spirited discussion about financing in general:  new programs, procedures and products. 

I watched as Lynn stepped right into the conversation.  It was very clear she knew exactly what she was talking about and at times it was hard to tell who was the loan officer.  Her detailed understanding of real estate financing was powerful and impressive.  She and John Powell agreed that knowledge of finance and the ability to discuss financial options with prospective buyers is essential to gaining buyer loyalty.  It’s a value package they recognize and, once they see it, they don’t want to leave it. 

When I sold real estate (you know:  back when dinosaurs roamed the earth), finance was something you just learned.  You studied it, tasked your favorite mortgage people with keeping you up to date and you talked finance all the time.  Your knowledge of finance enabled you to makes sales that  you’d otherwise lose.  Somewhere in the ’90s there was a shift.  It seemed that agents knew less and less about the financial products that enabled their business.  Increasingly the lender was brought in to answer the most basic finance questions. 

Of course I’m talking about traditional agents here — I had not encountered Help-U-Sell yet — and I think the aversion to finance was a result of a couple of broker driven factors.  First, as the mortgage industry became more regulated and more complicated, brokers were concerned about the liability of agents trotting out their possibly incomplete or inaccurate understanding of finance.  Understandable.  Second, brokers found that they could retain their solid middle producers if they kept them slightly dependent on office resources and so de-emphasized the importance of agents understanding finance.

Since Help-U-Sell is a broker-driven, consumer-centric model, I’ve seen a much greater willingness among our people to learn and use finance in their day to day real estate practice and I’ve seen it make a huge difference, especially with buyers.  Buyers, like any other consumer, will stick with you if they perceive value.  Everyone can show them property — some will zero in more quickly on their needs than others, but it’s not a difficult process.  Anyone who pays attention can tell them a little about each community.  But it’s the pro who can show them how finance can make the home more affordable, how it can solve many of the problems that come up in a real estate transaction.  That’s value. 

Yes, you do need a strong relationship with several lenders you can call for the very detailed explanation of finance.  But you also need to understand the products, what they can do, how they fit and the benefits and pitfalls they bring to the transaction.  All you have to do to see the power of this knowledge in action is to listen to Jack Bailey talk about creating a ‘Real Estate Plan’ for a prospective purchaser.  I’m sure Lynne Holcomb is just as impressive. 

Make time with your favorite mortgage people to take you through their portfolio of products.  Have them show you how they work with qualifying guidlines and underwriting requirements.  Become a student of finance and then don’t be afraid to talk about it with your customers — with the caveat that you’ll want them to discuss this with a mortgage rep too! 

I remember a sad cartoon I saw once.  It wasn’t funny, really.  A real estate agent and buyer were standing outside a house that was for sale.  The buyer says, ‘Hmmm.  $180,000, right?  If I put down 10% and get a 30 year fixed, roughly what would my payments be?’  The agent is digging in her bag.  ‘Hang on a second,’ she says, ‘Let me call my lender.’  Sad.