For credit unions wanting to grow their purchase-mortgage portfolios, the secret is online.
Published findings from the National Association of Realtors’ “2012 Profile of Home Buyers and Sellers” report points to the Internet as an important, if not the most important, tool to serve and attract future homebuyers. The report shows that 41% of all homebuyers tend to use the Internet to look for properties as their very first step–more than any other first move. And an additional 11% went online first to find information about the home buying process.
But that’s not to discount the important role of the real estate agent. Of those surveyed, 21% did contact an agent as a first step, and a total of 89% of homebuyers surveyed purchased properties through a Realtor.
But what can’t be overstated is today’s influence of the Internet. The vast majority of respondents–90%–used the Internet to assist in home searches, including a whopping 96% among buyers under the age of 44. The Internet provides credit unions an unprecedented opportunity to be consumers’ first point of contact in the home buying process, and being first to connect with a homebuyer online significantly increases your chance of landing the mortgage loan. To catch prospective homeowners, you must be online.
You can boost your online presence by making your website a resource of home buying and selling information. Link to helpful articles or calculators, promote upcoming home buying and financing seminars, promote your mortgage options and provide online preapproval applications.
Your members are already looking for this information online. Let them know your credit union is the place they can find it.
For many real estate purchases today, Realtors remain a driving force, and credit unions are wise to build strong relationships with them. Most agents have a strong online presence, as well as direct involvement with potential homebuyers, who often ask them for lender recommendations. It pays for credit unions to be front and center in these referrals.
To build your agent network, get involved in local business groups or chamber events where you can meet Realtors and assess whether there is a good fit. Develop opportunities to partner with brokerage firms on homebuyer seminars, community events such as neighborhood improvement days or online sponsorships and adverting. Find a company that supports your mortgage business by providing prescreened Realtor networks. There are some serving credit unions exclusively. And make sure your efforts provide business development opportunities for the Realtors too, as both sides need to see benefits from the relationship.
Two other key findings from the NARS research for credit unions to consider. The typical buyer’s home search extended 12 weeks in 2012, so there is limited time to reach these prospects. Make sure your online efforts stand out. Among all home purchases made in 2012, 39% were by first-time buyers, a younger, online-savvy demographic and prime target to help strengthen your membership base and attract younger members.
The real estate market has changed significantly in the years since the economy buckled. Record-low home prices and interest rates continue to make home buying an attractive option. That is leading many consumers to make sacrifices (cutting back on spending, entertainment and clothing, for example) so they can afford a home. At the same time, market changes are making it tougher for consumers to navigate through the paperwork and other requirements. And tighter credit standards and regulations have made it harder for many to borrow money. While NARS found that 87% of homebuyers financed their homes in 2012, 40% said that the mortgage application and approval process was much more or somewhat more difficult than they expected.
Never before have consumers relied so heavily on assistance when buying or selling a home. And that’s where credit unions can take the lead. More than any other players in the financial sector, credit unions continue to be connected to those they serve. Members in the market for a home need help, and the Internet is where they start looking for it. Your credit union needs to be there.
For many credit unions, growing the mortgage book of business is a key annual goal. Knowing and understanding the online behaviors of today’s homebuyers and sellers can help you not only meet this goal, but improve your bottom line.
Mike Corn is CEO at CU Realty Services.
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