Transactional vs. Relationship Selling

The Real Estate Mortgage industry has been plagued for the past 5 years with an epidemic of transactional sales people. Originators and companies who only cared about how much money they could make on each transaction. For those people living in St. Louis, we have the poster child for this with companies whose phone numbers end in the digits of 9999. They preyed upon the uneducated, uninformed, weak willed individuals and families. Often raping them financially while telling them what a good deal they were getting. With the collapse of the sub-prime mortgage market, these originators have fallen on hard times. Not as hard of times as the borrowers that they took advantage of, but some may yet feel that pain. I recently met with an owner of a sub-prime mortgage company who will soon have to sell his million dollar house and hope to break even on the sale to get out of the mortgages he has on it. With the current real estate market, he will probably end up in a short sale position. I don’t wish that pain on anyone, but remember “you reap what you sow.”

So how do we teach the public to recognize the difference between transactional vs. relationship sales people? I think the first thing that has to happen is that the consumer needs to not view the mortgage originators services as a commodity. When this happens they have all ready set themselves up to be used. Conversely, when the consumer views the mortgage originator as a financial professional they stand a much greater chance of having their immediate needs met while gaining a trusted advisor to help them manage the largest investment they will probably make in their entire life. However, because the mortgage industry has been filled with snake oil peddlers looking to only take advantage of people, it is very hard to get people to trust in the originator. Once the consumer is no longer worried about getting the lowest rate, least amount of fees, best deal and focuses on what their real long term goals are they will have a better chance of not ending up at the closing table with a higher interest rate, more fees, no money, no loan officer to close their loan or worse yet, loan terms that are unacceptable to them but they feel that they have to close in order to keep their house of their dreams.

To learn more about having a mortgage originator be a trusted adviser for you, please contact Chris Scheer, Your Residential Lending Expert at chrisscheer@msn.com.