Contrary to popular belief, I’m not a psychiatrist or psychologist, and I don’t play one on TV. However, over time, I have come to learn that there’s a great deal of psychology involved in sales – all types of sales – but this is especially true in the real estate/mortgage world.
Buyers don’t “pay” for a real estate agent to represent them in the purchase of a home. Because of this arrangement (and there’s absolutely nothing wrong with it), we could say the Buyer’s Agent is like a Fairy Godmother (or whatever is the male fairytale equivalent – I’m not up on my ‘tales jargon these days, sorry), helping dreams come true.
Lenders on the other hand, unless we’re a sterling referral from a friend or family member whose recommendations have never failed and whose views are unassailable, are viewed as a necessary evil. To some, we’re seen as the old crone living in the forest who holds the one item standing between the home buyer and their dream. To others, we’re one of a handful of shady characters living down by the docks who will take their soul if they don’t choose the right shady character.
We as lenders can tell people about great products and programs until we’re blue in the face, and we might attract a few stouthearted individuals who are curious, but we don’t have the “credibility” of the Buyer’s Agent in the eyes of the average home buyer. I don’t say that to complain or to advocate better conditions for us on the lending side – it’s a statement of fact in more than the majority of cases.
Because Buyer’s Agents have the Fairy Godmother effect, they have that built-in “credibility”, and we as lenders would do well both to recognize that and team up with agents to become advocates to home buyers for the programs and products we see as being the best fit for market conditions. Let me give you an example – it’s one I’ve sort of been harping on for the last little while.
A Reverse Mortgage Purchase is a REALLY good thing for certain people whose home buying goals and objectives align with what a Reverse Mortgage has to offer. However, due to some less-than-honest people in the past, there’s a lot of lost credibility and we lenders get lumped in with the bad apples. An agent, on the other hand, who has sold two or three houses to the same individual over the last thirty years is in a perfect position to bring this up and plant the idea in their client’s head. The same words could come out of both a lender’s mouth and the agent’s mouth, and they’ll be “heard” completely differently by the buyer: the former might make the buyer cringe, the latter could make them smile from ear to ear.
I’m going to date myself here, but I’m okay with that. In the old Saturday morning cartoon “Super Friends”, there’s a sibling team called the Wonder Twins. They had powers that were distinct to each individual, but those powers could only be activated if the two came together. Apart, they were mere mortals with funny names. Together, they could take on the world.
THIS is the psychology of the sale in the real estate/mortgage world. Lenders and agents SHOULD be a perfect complement to one another and play to one another’s strengths. Too often, though, individuals on both sides of the table think they don’t need their counterpart or that they’re more important than the other. Following the psychology theme, that’s crazy!