Residential Magazine

Start Fast to Finish Strong in This Challenging Year

Prioritize quantity over quality when working with referral partners in today’s market

By Dennis Black

In 2022, many lenders as well as individual mortgage originators struggled to adapt to the higher interest rates experienced by the industry. Part of the reason was the lack of quality partnerships with real estate agents — partnerships that were put on the backburner during the recent refinance boom.

For many mortgage industry professionals, the refinance transaction was so alluring and so plentiful that they neglected their real estate agent relationships. A lot of people made that mistake, but you can fix it.
First, you need to restore these relationships while also building bridges with more than just your close-knit circle of referral partners from the past. And you’ll need to commit to a strong outreach plan in the first quarter of 2023. What happens in these three months will quickly separate who is ready and who will struggle in the current mortgage environment.

Identify partners

Historically, mortgage originators have been taught to prioritize quality over quantity when it comes to real estate agents and other referral partners. This approach to selling may have worked when the rates were below 5%, but it’s not effective with interest rates of 6% or higher.
Buyer affordability has taken a hit due to rising rates, the run-up in home price appreciation in the past few years and the recent economic uncertainty. Real estate agents may not close a transaction for a month or two. Although these may be quality agents, this is as challenging of a market as the industry has seen for years. Today’s mortgage originators cannot afford to have too few Realtor partners.

For many mortgage industry professionals, the refinance transaction was so alluring and so plentiful that they neglected their real estate agent relationships.

Therefore, it is essential that mortgage originators not only work with top-flight Realtors but also try to convince more of them to utilize your services. So, how do you accomplish the task of connecting with more agents? This may sound counterintuitive, but you need to narrow your list. Analyze your pool of prospects in your geographical area and delete any nonproductive agents. This will save you time and effort for calling the most promising referral partners.
Some originators will desperately try to connect with every real estate agent in town. That’s a lesson in futility. You need to cast a wider net, but you also need to grow your network by a manageable number to provide the best service. Many originators will have successfully worked with a small circle of no more than 10 referral partners in the past. You want to aim to create strong relationships with 15 referral partners. Aim to identify these 15 partners by the end of first-quarter 2023.
Once you have identified your pool of referral partners, start calling them in the first few weeks of January and February to set up meetings where you sell your company, products and individual services. You’re unlikely to get an agent’s business on the first call. The idea is to start the conversation and get ready for targeted follow-ups in the coming weeks.

Create a routine

Selling never stops. What separates success from failure is lack of follow-up. Meeting with someone is a great start, but what determines the yield of referrals is the consistency in the follow-up. Without that, you will not differentiate yourself from your competition.
How do you do that? There are some critical things you need in your tool bag. First, you must have proof (such as a written testimonial) of the quality work that you and your company provide to Realtors and borrowers in your community. This could be made available on your website, or through referral correspondence from a Realtor or borrower who had a great mortgage experience when they worked with you in the past.
If you’re pursuing an agent whom you’ve never worked with or trying to rekindle a relationship that has gone dormant, you need to demonstrate that you are a top-flight professional who can handle today’s challenging market. Without proof, you’re just another face in the crowd. Make sure you either have a testimonial available at your meeting, or you can show your referral partner where this exists on your company or personal website.
In the first quarter, develop a plan to call referral partners throughout the year. Don’t deviate from this plan. Consistent follow-ups will be vital in a market with fewer sales opportunities.
Set proper expectations with the Realtor and the borrower from the generation of the loan to the completion of the funding. By doing so, you will satisfy both your Realtors and your clients, who will send more referrals your way.

Build momentum

Are you willing to put in the time and effort that will be required in January and February? The climate will be difficult beyond just the outdoor temperature and it may well be difficult to even set up meetings with referral partners. After all, you’re not the only one trying to generate business in this environment.
Selling is a process of consistent behavior. Referral partners and clients expect you to execute and deliver quality service, no matter what their definition of the word “service” is. The reason why a mortgage originator succeeds or fails usually comes down to a lack of follow-up, or an inconsistent approach with either their referral partners or clients. Proactive communication always wins the day, whereas reactive communication causes someone to look elsewhere for future partners.
Set your plan into motion immediately. Hesitation on developing a strategy will cost you in April, May and June, and it will cause you to fall behind throughout the entire year. Having a plan and executing it early in the year will give you momentum and carry you through the end of 2023. ●


  • Dennis Black

    Dennis Black is the CEO of Dennis Black and Associates, a training organization devoted exclusively to the development of sales and management professionals within the lending industry. Dennis Black and Associates has trained more than 120,000 mortgage professionals throughout the United States, Canada and Australia. Black speaks at conferences sponsored by the Mortgage Bankers Association and NAMB - The Association of Mortgage Professionals about selling strategies and is a frequent speaker at state conferences.

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