By Todd Condon, Director of Sales in Chicago - New Home Star
We put so much of our focus on procuring sales. But an area of business management where we can see improvement is making sure they close. Well, not just close, but close on time and with few surprises. One great practice I'd like to share is how important the implementation of a preferred lender program can be as an integral part of the sale.
So many times we hear a customer say that they already have a family member or friend in the business that will do their loan. And how many times do we want the sale so bad that we agree to their plea? But in doing so, I would like to suggest that we may have just done the customer and our builder client a great disservice that might not be realized until much later on.
As the expert, it's our responsibility to overcome objections and set great expectations for both parties to agree upon. But none could be more important than sharing the strength of a builder/lender relationship that helps the customer understand we provide this service as part of our commitment to their overall buying experience. It's relationship selling once again, and its well worth our effort for a multitude of reasons.
Think of our builder clients' expectations and how we can ensure we deliver after working hard to achieve our sales goals each month. How great would it be to have answers as to the quality of our backlog, and being prepared to commit to closing dates without fear? Having a strong preferred lender program in place not only supports this, but it makes our job so much easier.
Here are some best practices that can help you. Create a spreadsheet that contains the following information: buyer last name, contract date, address/home site, contract sales price, date of loan application, date of initial loan commitment, loan type, closing date, appraisal date, rate lock and a notes section for weekly (yes, weekly!) loan status updates.
Now, take it one step further and insist that your loan officer use this form and send it to you each Friday morning in advance of a planned weekly call to review your entire backlog. Obviously there's information we cannot know due to lending regulations, but we can insist on a loan status update. During these weekly meetings, take notes and be sure to drill down and instill accountability. Don't stop at "I'm waiting for..., or I'm hoping for..." Insist on a commitment and action from your loan officer such as "by May 17th we, the customer, will have the document we need."
If you read that sentence once again, there's a deadline the customer will have performed, and there's no gray area. What a powerful and efficient culture change! What happens next is pretty simple; on or by May 17th, you'll be in conversation with the loan officer to verify the deadline was met or what agreement can be made, and everyone is on board knowing what the next step will be.
Imagine how your invested loan officer will step up and convey this same accountability to the buyer. Suddenly, we have a mutually agreed upon action plan to resolve key issues, save time and avoid surprises. By insisting on a backlog management practice like this, you'll instantly elevate expectations for performance, accountability will increase, and you'll spend less time managing backlog and more time selling.
Now, looking back at this as a best practice idea......ask yourself how many different loan officers or mortgage companies would you be willing to manage. Who do you think will agree to communicate with you and help you manage your business at a high level like this?
Find a great, well established lender, then find a back-up lender in case a niche portfolio product is out there that helps you cover your customer's needs. Then, insist the customer gives you the chance to take care of them and explain the great process you've created for them to ensure they will get the keys to their new home on the day you promised.
Creating a preferred lender program and backlog management practice like this isn't easy. You'll have to hold people accountable to due dates and set strong expectations. And quite honestly, you'll get push-back because many people just don't like it. But through it all, your backlog will be solid, you can focus on the challenges of a few instead of the many, your customer satisfaction will skyrocket, and your cancellation rates will fall. What could be better than that?
Todd Condon began his professional career in 1995 as an aspiring golf professional in San Diego, CA. His career path evolved, however, as 2015 marks his 15th year in the homebuilding industry. Todd has experience working for two of the top five builders in the Arizona and Chicago markets, and now is the Director of Sales for the Chicago Division of New Home Star.
