NAR 2011 Home Buyer Survey Results – First Time Home Buyer Statistics

National Association of Realtors® 2011 Home Buyer Survey Results – First-Time Home Buyer Statistics.

The 2011 NAR report called “Profile of Home Buyers and Sellers 2011” has just been released, with a huge amount of information that will help you plan where you should be spending your time and your marketing dollars!  While this info is from 2011, what it does is identify trends.

In 2010, 51% of all home purchases were made by FTHB.  In 2011, it was 37%.  The 2010 numbers are skewed because of the First-Time Home Buyer Credit offering.

Overall, the numbers have significantly changed from 2011.  The entire report provides stats on first-time buyers, repeat buyers, FSBO, and investors, but this article is just about first-time home buyers with a little commentary from me on why the information is critical in your business planning efforts.

  • Over one-third of all homebuyers are buying for the first time.  Read on because you’ll also learn how a huge percentage of FTHB find you and the home they want to buy.  I suggest that you align your marketing with the way FTHB find information – but more on that later.
  • 77% of first-time buyers rented an apartment or a home prior to buying their first home.  Marketing to apartment complexes is still the number one way to market to and get leads from FTHB.
  • 48% of FTHB were married.  The other 52% are categorized by “unmarried couples,” “single men” and “single women.”  If you hold first-time buyer seminars, consider segmenting them into “singles only” or “couples only” events.  Each segment has its own set of home buying and loan approval issues.
  • Some areas are more affordable than others, but 48% of FTHB purchased a home $150,000 or less.  If you have listings in this price range, you may want to ask your sellers if they can offer home buyer incentives, like paying for closing costs.
  • The average distance that a buyer has moved is 12 miles away from where they were previously living.  So, if you are considering marketing to apartment complexes, check to see if there are affordable ($150,000) homes within that 12-mile radius.
  • Based on the information sources FTBH used, you may want to reallocate some of your marketing dollars to online marketing and open houses instead of printed ads.
    • 92% searched for homes on the web
    • 88% searched for real estate agents online
    • 53% used yard signs
    • 40% went to open houses
    • 28% used newspaper ads
    • 17% used homes magazines
    • When it comes to mortgage financing, 95% of the mortgages were fixed-rate type loans. In addition, 26% of FTHB say they got at least a portion of their down payment from a gift.  Since Fannie, Freddie, FHA and VA have their own “gift fund rules,” please call me if your clients tell you they will be getting their down payment as a gift.

So, think about creating a marketing campaign with  your real estate agents that exclusively targets first-time home buyers.  And a little shameless plub here, if you are looking to purchase apartment complex mailing lists, www.ApartmentToolKit.com Karen Deis 800-535-3343

The Tax Season Milestone

Each year I see friends, colleagues and family make the obligatory pilgrimage to their CPA or HR Blocks’ team of TAXperts to pay homage (and money) to the IRS. It occurred to me that what may be for some a painful, fiscal exercise.  For others, namely the entrepreneurs in my inner circle, this is the time of year that they receive their report card for the previous year’s efforts. “Did I do well? Do I have a Tax problem or a Money problem?” According to my witty and brilliant CPA, Ron Sahmel, it’s never both!

Maybe April 15th should be fiscally and professionally to business professionals what New Year’s Day is for setting personal goals. I mean, when are we more aware of the finances than at tax time? Instead of making a resolution to lose weight, on April 15th, maybe we decide to spend less on entertainment and business lunches. Or commit to donating regularly to our favorite charity. Maybe this is the year that we start using Quicken or QuickBooks, so we’re not running around like a crazy person at the last minute trying to enter 1000’s of receipts into Turbo Tax.

Whatever I may be experiencing personally or professionally this time of year, I have observed that my clients and colleagues are more stressed from March 15th until April 15th and they are  always glad to have Tax Season behind them. Its like, “Glad that’s over, now we can get on with 2010!” I also find that the best marketers I know in the mortgage business always have a Tax-themed letter, e-Mail newsletter or Blog post to offer some tips or advise for their clients. This never goes out-of-style because its a universal point of contention with borrowers.

Some of the best examples that I have seen are the letters that are sent out by loan officers to each of their new, first-time home buyers from the previous year featuring, home-owner, tax saving tips and a list of questions to ask their CPA. This is of course accompanied by the offer to make an introduction to the loan officer’s CPA referral partner, if the new home owner does not have a tax professional. This also lays the ground work for repeat business and referrals if the client finds themselves waiting until the last minute. But nobody does that, right?

Enhancing Your Social Media Presence Through Email

One simple step everyone can take to make their mortgage marketing email efforts more compatible with their social media efforts is to link all of your emails to your social networking profiles or blogs.

Most of us already have email signatures, so why not add these links right there with the rest of your contact information? Since most of the well known social media sites (which is where you should be focusing your efforts anyway) have well-recognized logos, I think it is a great idea to use those logos/icons as the hyperlink vs. just a plain text link; that catches the eye of the reader a little better, plus it is more visually appealing.

So the way I have done it is I have a link to my FaceBook, LinkedIn, and Twitter profiles as well as a link to my blog. If you don’t have profiles on any of these networks and don’t have a blog that is a whole other discussion (you need to get them).

       

Unfortunately, adding these icons to your Outlook email signature may be a bit more cumbersome than you might think. That being said, I have prepared a brief tutorial video below to guide you through the process. This demo is accurate as of Outlook 2003.

By the way, this is the site I used to get the icons we used in our email signatures: http://www.iconspedia.com/. But a simple Google image search will find you whatever you are looking for as well.

Famous Last Words: What is your (mortgage professional) lasting impression?

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A defining moment, a Hollywood hero-shot, a quote to be remembered – famous last words leave a lasting impression.  Here are just a few of the great ones that come to mind – “With great power comes great responsibility” (Spiderman); “And in case I don’t see ya, good afternoon, good evening, and good night!” (The Truman Show); “I’ll be back” (pronounced, “baaaack”, no reference necessary).  These simple yet profound one-liners remind us instantly of an entire story-line, create a wave of emotions and maybe even bring goose-bumps to our arms.

Recognize any of these famous mortgage marketing one-liners? – “I look forward to a mutually beneficial relationship”; “I hope my service exceeds your expectations”; “Working to be your lender for life.”  Really, that’s it??  Is this really the lasting impression that some hope to leave with their clients?  Now, I know that the mortgage business is no Hollywood movie script, and most clients have likely not gotten goose bumps from copy on your website, but there has to be a better way to communicate a message to clients that will (at minimum) leave some kind of impression, even if it is only moderately memorable and only partially lasting.  If you are using one of these hackneyed phrases (look it up), I beg you to stop, for your own good.  To be blended in with the mortgage masses and to be remembered only as “the guy (or gal) that did our mortgage last time” is to travel down a road that leads to a quiet phone, a rarely visited website and little to no repeat/referral business.  To be remembered by past clients, to be recalled and to literally be re-called when the need for mortgage info arises, you need more than a cute one-liner, more than a bullet point list of service standards and more than a subscription to a “put your picture on this postcard” service.

Here are a few suggestions to make sure your last impression is a lasting impression:

1. Imitation is the highest form of flattery, but not very memorable. Flattery is nice, but it may not be the best strategy in being remembered.  Be unique, be creative and be sincere.  If you promise to keep clients informed throughout the loan process, you better have a solid plan and system for doing just that.  If you boast of helping your clients manage their mortgage after closing, you need more than just a scheduled once a year phone call.

2. Great service is a great start (only a great start). Too many mortgage professionals assume that the lasting impression of their exceptional service will create repeat business.  The real truth is that exceptional service will only create the opportunity for repeat business.  In other words, your past clients will consider you in the list of candidates (maybe even highly consider you) when they are looking for a mortgage.  Where you fall in that hierarchy is based on how great your service (and their mortgage experience) really was and the last suggestion below – which also happens to be THE most important thing to remember, when hoping to be remembered.

3. Don’t let your last impression be your final impression. Great marketing slogans and company-wide sales promises are certainly important in being remembered; and great service is critical for building a business (and staying in business); but don’t assume that your clients will come back to you as their sole source of mortgage advice.  Consumers are continually being bombarded by mortgage solicitations.  Your clients (the ones you won over with your exceptional service) are constantly receiving offers for mortgage advice and information – from their loan servicer, from television and radio advertisements, from real estate and finance websites and from banner ads galore (someone must be clicking on the dancing lady, right?).  In order to build a lasting impression, you must be continually communicating with your clients.  And communicating with your clients is much different than marketing to your clients.

Knowing the difference between those two (famous last words: “ . . . and knowing is half the battle” anyone?) is the key to making sure that your last impression, is in fact, not your last impression.

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myRateTrack.com is a web-based marketing system for mortgage professionals – to market to past clients and new leads.  The myRateTrack.com system automatically generates and delivers (via email) detailed, customized, customer-specific refinance reports (also available instantly); includes a target refinance rate notification system; and a feature to offer advertisement space to referral partners.  For more information, call 888.781.0005 ext 1 or visit www.myRateTrack.com.

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Latest Article in Scotsman Guide

We talk a lot about yielding big results with simple Web tools here on Lenderama.com. I thought I would take the message to an even bigger audience in my latest article in The Scotsman Guide.

Look Inside >>
August 2009 Residential Edition

I would love to have you give it a read and come back and tell me what you think.

Next month’s article is on using Consumer Education in mortgage marketing. Do you have any other ideas or topics that would be useful to your mortgage business?

Mortgage Blogging: What's In It for Me?

Most mortgage professionals are skeptical about Mortgage Blogging.  To most, it looks like a waste of time.  If you’re in this camp, don’t feel bad. I was too for 2 1/2 years.

In the video below, Mark Madsen and I set out to explain the benefits of Mortgage Blogging.  This event is the first of many online classes being brought to you free of charge by NAMB.

If you’re a NAMB member – thank you!  Maybe you could bring aboard one more member in your town, perhaps a vendor?  If you’re not a NAMB member, will you please join today?  They are fighting the good fight for you – and for the consumer.

Answer Borrowers' Mortgage Questions

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SmartHippo.com, the first community devoted to helping homeowners get the best mortgage rate, recently launched SmartHippo Answers.

This is a great opportunity for our community to help borrowers and position yourself as a mortgage expert. Nothing markets trust and credibility better than helping people with questions.

In order to make this as simple as possible I have added a feed of the latest questions coming in from SmartHippo.com and the right sidebar. If you see something you can help with–simply click and answer!

This is George Favvas, CEO of SmartHippo.com explaining a little more about SmartHippo.com:

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Elite Originators Aren't Elite Because They Wear Nice Ties.

I’ve had the good fortune of working with some the mortgage industry’s sharpest and most successful originators over the past six years – and I’ve taken notice of a few irrefutable facts I’d like to share with you today.

1) Elite originators never relax.

If you’re not interested in taking your business to the “elite” level, this article may not be for you.  You see, the originators at the top of the food chain are always working on their business. Their passion for success just seems to consume them. Twelve hour days are not the exception, they’re the norm.

2) Elite originators consistently reinvest profits back into their business.

If you look at the world’s great brands: McDonald’s, Coca Cola, Gillette, all of them have built sustainable competitive advantages over the years by reinvesting profits back into the brand. Top producing mortgage professionals have the same mentality.

3) Elite originators have multiple channels for new client acquisition

I can’t stress this fact enough. Success in the mortgage business should not be solely measured by how many loans you’re closing per month/year. The better, and more accurate litmus test is to measure your production in comparison to your peers. Elite originators consistently execute on their business plan, picking up chunks of market share month over month… year over year.

Several years ago, I began teaching our clients a simple concept I like to call “Three Channels for Client Acquisition”. It’s not rocket science, but very few originators execute on this concept properly. You should have three mutually exclusive mechanisms in place for driving new business. My recommendations:

Channel #1: Religiously Mine and Communicate With Your Database

This is something you already know you need to be doing.  Yet, most originators fail to execute properly.  You should have a mortgage crm system that integrates postal mail, electronic mail, social networking, blogging and data mining.  Many of the originators I meet who are stuck at an “average” production threshold execute on these strategies when they have time or when they’re highly motivated.  But in order for your crm system to bear consistent fruit, it must be harvested consistently.

Elite originators rarely, if ever, fail to harvest their database.

Channel #2:  Establish a Diverse and Loyal Network of Referral Partners

Again, this is something most every originator knows he ought to be doing.  Yet again, most fail.  The simple reason most originators fail at Channel #2 is because they cannot answer one simple question:  What Makes You Different? Elite originators not only invest profits back into their business, they also invest vast resources into deepening their knowledge base.  It’s not enough just to ‘know what you’re doing’ anymore.  You must be able to clearly and confidently articulate your competitive advantages.  This takes preparation, practice and repetition.  If you’re managing a pipeline and putting out fires all day, it becomes difficult to divert your attention to deepening that competitive advantage.  Elite originators know this, and they use it to distance themselves from their competitors a little bit every day.  Hey, I already said they’re working 12 hours a day – you don’t think they spend all 12 hours putting out fires do you?

Channel #3:  Find Your Passion, Time Block and Experiment

I like to refer to Channel #3 as the “wild card”.  There are so many awesome ideas out there, many of which we’ll be teaching at Mortgage Revolution in November 2009.  Brian Brady is a master social networker.  Derek Egeberg just held a first-time homebuyer seminar that yielded 287 attendees and has filled his pipeline with prospects.  David Lukas hosts a radio show in his hometown and expertly integrates referral partners into the mix.  I could go on and on with examples of how elite originators are investing their energies into unique channels of customer acquisition.  You’ll never know which one is right for you unless you pick one and give it a go.  You might want to come and see for yourself what your peers are doing to dominate their market in November.

In conclusion, the true difference between the average and elite originator comes down to one thing:  execution.  The average originator “knows” what they ought to be doing.  The elite originator actually does it.