Find Your Incentive

Jeremy Potter, Founder, Next Belt Strategies

First-time homebuyers have an incentive to buy a house. For some, it is quite traditional. The financial incentives of earning home equity and potentially generational wealth work for many buyers. For others, it is practical. The ability to control improvements or personalize their home. ?A larger backyard to finally get that dog or another dog or a couple of cats. We've all heard that more and more Millennials are buying homes because of their dog. My point is that you do not need to share the same motivation as your customers to understand what their incentives might be. Certainly, identifying their reasons for wanting to become a homeowner is an important step in earning their trust and then their business.

What about your incentive to work with them?

If you ask most mortgage pros, or even if you don't because many will just volunteer it, they will say "Seeing someone achieve homeownership is why I do my job" (or some variation of that). It is a job, though. Making a living is also an important motivation. We know that often those are in conflict. Look, it's not a major conflict, not a dealbreaker, but working with someone for a long time before they are ready for homeownership is expensive. There are other loans and other people you could be helping in the time it takes you to work with someone who is not ready.

It is now well-known that first-time homebuyers are waiting longer and longer to afford homeownership. It is not just about later in life either. Once someone starts shopping, it also takes more offers before they are likely to go under contract. This can be true for move-up and downsizing clients as well. The average age of the US homeowner is now 58 years old. It takes longer to afford a home, and that means you are in it longer, too.

Longer, longer, longer is a rough theme for mortgage pros who are paid on commission. No matter the extra passion and inspiration that comes with helping people achieve the American Dream, the incentives are working against you.

This means you have to figure out your own incentives...for now. This is critical because it always takes companies longer to catch up to the trends than those on the front lines. You are on the front lines of these home purchase trends. You will have to turn lemons into lemonade, if you know what I mean.?

At some point, we will restructure industry incentives. It's inevitable now. Mortgage pros will be able to work with first-time home buyers longer and longer prior to the home purchase without fear of not getting paid in the meantime or losing the lead later on. We are not there yet; you need to address this inconsistency with personal branding and tools.?The incentive is to help people for as long as it takes to become ready on their terms. The disincentive is cost and fear of losing the client once they are finally ready to buy.

Make your own incentives: Merge brand and tools

Celebrate slow.?Take credit for the time you spend with your purchase clients.?While it does not result in immediate compensation, it is an investment not only in that customer but also in all the referrals and future business you'll generate. Yes, everyone says this, so how do you take credit? Refinance celebrates turn times. Literally, how little we worked with someone.?Purchase should celebrate partnership. Advertise how long your client has been your client.

Outsource time management.?Yes, this is a FinLocker-produced newsletter and so it makes sense to mention FinLocker,?I suppose.?The reality is that incubation and nurturing?- weird but applicable words - are more important than ever, and there are not a lot of tools out there. Use the tools and provide feedback to help the providers of these first-time homebuyer tools improve.?We know it's all about trust.?Leverage technology to support the customer, ease your cost burden and build trust. This is how to streamline the cost of time.

Scale your brand.?Increasingly, the combination of personal brand?+ technology is allowing subject matter experts like you to create the AI version that can actually assist you.?We know chatbots and FAQ "look-ups" powered by AI are becoming ubiquitous.?For years, we talked about how you cannot scale a person.?With AI, it's becoming increasingly likely that we'll be able to scale a person.?Most mortgage pros are in some version of doubt or denial.?At the same time, tech companies are getting better and better at creating you digitally.?This would allow for personal brand connection AND lower cost engagement. You can own this tech before your lender does.

Find ways to fund your?strategy.?The old Hollywood cliche was "two for them, one for me."?If two movies are commercial-focused, one can be a passion project.?No reason we cannot look at leads and your valuable time in a similar way.?This is not a recommendation to ignore the realities of the current incentive structure. This is an encouragement that there are more and more ways to make it work. For you, for first-time homebuyers.

A mentor once said to me, "Show me your incentives and I'll show you the outcomes."?The current incentive structure values speed and efficiency over all else. Trust is time-consuming and expensive. As tech improves and scales, you can be on the front edge of adoption.?This will make you more resilient as a sales professional AND serve customers in new, important ways. Embrace the incentives and enjoy the lemonade.