Saving Future Referrals When a Transaction Goes South
It’s been said a million times, but a successful real estate business is built on relationships. From real world networking to the virtual world of your website and social media, all your marketing efforts are focused on making new connections, building on current business, and leveraging past clients for referrals.
In a perfect world these efforts would result in exponential growth with every successful sale resulting in more business. Unfortunately this is not a perfect world.
As a Realtor, you are the central point of contact for homebuyers. You play a pivotal role in a complicated process that has any number of possible points of failure. There is also the precarious balance you must maintain between your professional partners and your clients, both potential referral partners.
How you manage when something goes wrong is as important — maybe even more so — than getting everything right. There are many possible scenarios where a real estate transaction can go awry. Let’s look at two which involve your relationship with the lender.
1. Customer’s mortgage declined – Even a customer with a pre-approval can fail to secure a loan. There could be a glitch in their financial picture, like a sudden change in employment, a dip in their credit score, the loss of funds for a down payment, or a bidding situation where the cost of the home is greater than it’s appraised value and the customer is unable to fill the gap.
You might say, “this isn’t your fault,” and you would be right. You did your best to see to it the customer was pre-approved. You worked within their home buying budget and made sure every “t” was a crossed and every “i” dotted. Now you face a disappointed customer who’s had a bad experience.
What to do:
- Follow up and stay in touch. Relationships are built on trust. The last thing you want to do is abandon a future customer.
- Be sure the customer understands why things went wrong
- Set-up a conference call with the loan officer to understand what happened and how it may be avoided in the future
- If it’s a credit issue, develop a plan in conjunction with the loan officer to help the customer rebuild their credit
- Keep an eye out for listings that would interest the client. Even if they’re not ready to resume their search, they’ll appreciate you understanding their needs and continuing to work — though unofficially — on their behalf
- Add them to a nurture campaign that offers timely information on national and local market conditions
2. The unresponsive loan officer – As in the example above, the loan officer plays a critical role. While you walk the clients through houses in search of their dream home, the loan officer walks them through the mortgage loan process. But what happens when the loan officer doesn’t follow up, fails to return calls, or is disagreeable and demanding?
Chances are this is one of your lenders of choice. Maybe it’s the right lender but the wrong loan officer. Perhaps your primary loan officer was too busy to take your business and passed your client off to another. Whatever the reason, you’re left with a confused and unhappy client who’s worried they won’t close on time and lose their rate lock as interest rates rise. Again, you might say, this isn’t your fault and you would be right, but…
What to do:
- Don’t let the problem fester. At the first sign that the chemistry between the loan officer and your client is bad, get involved.
- Talk directly with the loan officer. Listen carefully to their side. Perhaps the client has misinterpreted the situation or the demand for documentation is taking its toll. If this the case, get the loan officer and the client together on a conference call and work things out.
- If the loan officer is no more responsive to you than the client, see if the lender will assign a new loan officer — or take your business to a different lender.
- If there isn’t time to change lenders or loan officers, talk with the loan officer’s supervisor. No one likes it when you go over their head, so this should be a last resort. You may get the problem resolved in the near term but lose a referral partner in the process.
- You can avoid this problem by working closely with your loan officer of choice and making sure he or she has a back up you and your client can depend on. The same goes for lenders.
When things don’t go as expected, your ability to communicate is put to the test. In each of these examples you have an opportunity to share your experience and knowledge. The disappointed client should mean more to you than a lost commission. The unresponsive loan officer deserves the benefit of the doubt. While there are always two sides to the story, the customer is always right. Your ability to mediate and make concerted efforts to resolve issues that disappoint will be remembered when it comes time to ask for a referral.