The scariest thing a car salesperson can see, according to the old saw, is a man wandering the lot by himself wearing a wedding ring. Can a deal be done then and there? Or is the real decisionmaker sitting at home?
The same sentiment holds true for the mortgage and real estate businesses — with an added complication. Seventy percent of millennials and 43 percent of baby boomers used an online tool for at least part of their mortgage application, according to a survey released last year by software company Ellie Mae, which processes roughly a quarter of all U.S. mortgages.
Mortgage originators need to determine who the fact-gatherer is and who the decisionmaker is in a family, or if that person is one and the same. Often-times, mortgage professionals need to do this without initially meeting the client face to face.
The Equal Credit Opportunity Act was passed in 1974, making it unlawful for lenders to discriminate based on race, color, religion or gender. Prior to the law, a single, divorced or widowed woman had to bring along a man to co-sign on any credit application, regardless of their income.
Even then, lenders often would reduce the woman’s income by as much as 50 percent when calculating what she could afford. Until 1975, many lenders assumed the man in the family was the decision-maker. Fast forward a few decades to the new millennium, the age of the internet and pervasive digital marketing, and you can hardly tell who makes the decisions.
Being a mortgage professional, you’ve been taught to look at the complete financial picture of a client, determine how they fit into lending requirements, present viable products and solutions, and then to not forget to ask for the business. There is a lot of time spent in determining the products you can offer a client. Understanding if you are speaking with a fact-checker or a decisionmaker can help you determine how to disseminate that information.
New loan originators are often so eager to speak to a client they forget to ask some basic questions. Even seasoned loan originators can forget these steps. It isn’t until the application volume slows down, and real estate agent and other business-partner referrals become scarce, that they are reminded to go back to the basics.
Here are some questions to ask early in the process that will help determine who you are speaking with, especially if it is a new referral that is trying to get a rate quote out of you:
Will you be the only person on the loan application?
Will you be using your income alone to qualify for the loan?
Have you or your spouse/significant other spoken with other mortgage originators?
Can we schedule a face-to-face meeting?
Once I determine a rate, I can e-mail you information you will need. Can I have both of your e-mail addresses?
Are you making the decision to move forward alone, or is that something you’ll do together?
You indicated that some of the downpayment will be a gift. Which side of the family is that coming from?
While asking these questions, also ask about retirement-account balances. Although both parties may have this info, if the party you are speaking to doesn’t have it, then they are likely not the decisionmaker.
These questions are used to help decipher if there is one or more borrowers, and narrow that down to who needs to be included in the conversations going forward, as well as who will choose the originator they will use.
It’s not always as simple as asking these few questions. Some borrowers make it much more difficult. You’ll have to listen for cues during your conversation. Always try to get a face-to-face appointment, as those clients are much more likely to choose you than the ones you’re speaking with over the phone or via e-mail/text.
During this time, you’ll also want to make sure that you are explaining the mortgage products and process in terms that are easily understood and easily retold to a potential second borrower. When face to face, the decisionmaker will likely answer any question that you ask. In most cases, they also will be the last person to speak at the end of the meeting and they will give their e-mail and contact information, as opposed to both parties.
If you’ve explained things over the phone or via e-mail/text, and the client comes back asking for clarification, that likely indicates that the other person is the decisionmaker. If they start the negotiation process through texts, however, you are likely communicating with the decisionmaker.
The role of the mortgage originator is an evolutionary position that will never be static. You will always have to seek to understand the changes happening around you with products and guidelines, the generational impact on sales, the economy, and market and rate trends. Once you have mastered all of that, then you can talk to the client, try to gain their business and make a sale.
Finding the decisionmaker is part of this lengthy process and is a transferable skill to any sales role, even when speaking to a real estate team about becoming their preferred loan partner. Although the questions may change, the process remains the same, and the opportunity for success will be largely based on how quickly you identify the decisionmaker and start speaking with them.