Dave: Glad you liked the series. The concepts I spoke about would apply, but it is a very different environment. I would like to highlight some of the differences:
- On the real estate side, you are working with independent contractors who legally cannot receive economic benefit or incentives to use the inside company. This is why the delivery of value to the agents is so important.
- On the builder side, you are working for the seller of the home. The sales agent may be an employee or an independent contractor. As you are working for the seller–or working with a partner of the seller–financial incentives to use their mortgage company or pre-ferred lender can typically be a major part of the equation. What retail loan officer has not lost a preapproved buyer to a builder offering $15,000 in incentives to use “their” lender?
It is not unusual for capture rates of builder mortgage companies to be 90% or more, which is much higher than you will see in a typical real estate office--unless the community is a vacation or retirement community which has a high percentage of cash sales. Or, some builders who don’t own mortgage companies approve a few preferred lenders who are in competition. In this case I will assume you are working for the builder lender with no “on-site” competition. These situations also change the job of a loan officer significantly, something I will cover in an upcoming column.