Many loan officers tend to shy away from first-time homebuyers. They assume that first-time buyers will be more work and worth less as a client. The general idea is that FTHBs don’t know enough about the process, will take more time, need more hand holding, and their loan amounts will be lower—therefore, not worth the trouble.
However, despite this widely-held belief, we’ve found the opposite to be true.
Our data tells us that the clients who focus on attracting first-time buyers do exceedingly well if they correctly approach the situation. If they do, their first-time buyer clients often result in more referral business, creating an exponential impact on the bottom line that far outperforms just about any other source of business they have.
Three Reasons Why First-Time Homebuyers are Worth Your Effort
So, let’s talk about how you can grow your business with first-time buyers. There are three critical points to consider.
First-Time Homebuyers Are Underserved
When first-time buyers start shopping for a mortgage, they immediately think about either their bank or an online lender. Unfortunately, these are often the worst possible option because neither offers the kind of personalized service that first-time buyers want or need.
Local mortgage companies are always better options because their loan officers know the local real estate market, the realtors, and have a good grasp of the issues, challenges, and opportunities a first-time buyer faces. As such, it’s a chance for you to set a standard of service and stand out from the rest. You want them to feel great about buying a house, and this is a chance to do that.
If you raise the bar high enough, they will continue to come back to you knowing you have their best interests at heart.
Realizing first-time homebuyers are so underserved and underserviced, this is your chance to gain their trust, build loyalty, and grow your bottom line.
More First-Time Buyers Qualify Than They Think
New buyers have a lot of preconceived assumptions from friends and family about what it takes to qualify for a mortgage. They think they need 20% down, need two years in their current job, or need to have a lot of cash in reserve. As we know, pretty much all that information is outdated, which gives you an opportunity to change not only their perspective but give them hope.
Most first-time buyers are surprised when they find out how simple and straightforward the loan process is. Of course, there are some non-negotiables, but it’s just not that stringent anymore.
Unfortunately, when they get turned down by the bank, it makes them think they have no options. The bank doesn’t tell them, “we can’t give you the loan, but here’s who can,” they just tell them they don’t qualify, and often, that’s the end of it.
This is your chance to change their thinking and be the “yes” they’re looking for. What they don’t know is your opportunity to turn things around and help them fulfill their homeownership dreams.
They Want Your Direction and Will Follow It
It’s incredible what people are capable of when they’re given the right direction.
As a mortgage broker, you’re the expert they can turn to. Give them a roadmap, and they’ll follow it. Some might need a little more hand-holding than others, but it’s a worthwhile process because you’re giving them hope, building rapport, gaining their confidence, and ensuring loyalty.
The easier you can make it for them, the more favorable their opinion of you, the better chance you’ll have of gaining referrals and growing your business. Those first-time buyers could easily turn into lifetime customers as they secure their real estate legacy.
First-Time Homebuyers Are Worth Your Time
First-time homebuyers might not be ready to roll the first time they meet with you. It’s incredible how many of them initially say they don’t have the down payment—but then when they’re told that’s the only thing standing in the way of qualifying, magically, an uncle or the parents come up with $20,000, and then it’s a go.
If you can get them thinking a little differently, everything changes.
So don’t turn them away—turn them around
If you need more rationale, consider this: first-time homebuyers result in ten times as many referrals as a move-up buyer does.
This is your chance to set a standard of service, to raise the bar, to change their thinking, and to frame yourself as an expert and your business as an ally.
First-time buyers are always eager to share—it’s a huge accomplishment! Helping them achieve their dreams gives them something to talk about on social media and it’s a great way to gain awesome testimonials. Best of all, they send friends, family, and colleagues your way.
It gives you something to talk about too; you’re amplifying their sentiment and celebrating with them, all of which helps in the effort to build your online brand.
Remember, NOBODY ever talks about how good their second mortgage loan officer was. You have a distinct opportunity to create that “wow” experience with your first-time buyers, and they will grow your pipeline.
Want to try working with more first-time home-buyers in your market? Our lead generation service will do that for you. Book a free demo and let us Empower your mortgage funnel.
We’ll see you at the top.