Friday, January 11, 2013

Business Plan, For Mortgage Professionals, Targeting First Time Home Buyers

The housing market, combined with the recent tax incentive, has created a new target audience for Realtors and Loan Officers. The need for a sales and marketing plan to address education, building relationships, and communication will generate increased business for the Loan Officer and Realtor to provide assistance to first time home buyer.

The housing downturn has created significant demand for homeownership, especially among first-time home buyers (FTHB), according to a survey on That is great news for the real estate market, but there are some significant challenges that Realtors and Mortgage Professionals will face.

First challenge: Looming Deadline with NO PLAN

November 30th, 2009 is the date the tax credit goes away. That's 5 months from the day this article was written, which seems like a long time but the reality is that it will be here before we know it. Those who plan on taking advantage of this opportunity need to have a well thought out, fool-proof plan to execute. The sad reality is that people have been/were so busy with refinance business that they didn't have time to build a plan. Others are starving for direction and want a plan but don't have the "know-how" to build one. A strategic sales and marketing plan includes tactics that keep your plan within the necessary timeline.

Second challenge: Weak Relationships

FTHBs are tricky and require a strong relationship and good communication between the Realtor and Loan Officer. As a result of the recent low interest rate environment or "mini refi-boom, mortgage companies focused much of their efforts and time on capturing the refinance opportunities, not building relationships with Realtors. The result: many Realtors were left unattended. Relationship marketing tactics are needed to generate a successful partnership to meet this challenge.

Third challenge: Weak Value Propositions

Everyone knows that Loan Officers need to partner with Realtors but the question is , "why would they partner with you?" Good service and low rates are overused clichs and don't differentiate. Relationships are great, but at the end of the day the relationship needs to lead to "value creation" for both parties for it to be sustainable. A sales marketing plan will outline the strategy needed to create value for the Loan Officer and Realtor.

Fourth challenge: Education Gap

The Obama administration is hoping that a recently enacted tax credit can generate housing demand and help mop up the existing unsold inventory. But according to a survey by Move, Inc.--which operates half (47%) of home buyers don't even know the tax credit exists! A marketing communication plan is needed to target the first time home buyer educating them about this tax incentive.

Fifth challenge: Fear in the Marketplace

-52% of Americans are concerned that they or someone they know will face foreclosure in the next six to 12 months.
-18.9% (one out of five) of homeowners plan to take advantage of the administration's new program to help prevent foreclosures.
-21% of all homeowners with a mortgage contacted a lender to restructure their loan in the last 12 months.
-Half (10.6%) of those homeowners that contacted their lender experienced success while 5% still await an answer.
-27.1% of adults believe that they or someone they know may default on their mortgage because of unemployment or because they owe more on their home than it's worth.

I won't even begin to mention the media's contribution to this fear. The reality is that people are scared and need guidance. The question is , "who will they trust?" They will trust those whom they have a strong relationship with and/or those who have unshakeable credibility. To meet this challenge create a marketing plan that brands you as experienced in your field and a knowledgeable professional that can be trusted.

The good news in all of this is that there is a ton of opportunity out there. Take a look at the statistics of when Americans are planning on buying:
-23% of all adults plan to purchase a home in the next five years
-5.8% within next 12 months,
-12.8% within the next two years

Here is the opportunity -

First-time Home Buyers make up over half (53.5%) of the market, and the government is offering them an ,000 tax credit to purchase a house. But here's the kicker: 47.6% of Americans don't know about the tax credit! That's almost half the American population! What this means to you is that a lot of people want to buy a home in the next 12 months and most of them are FTHBs who aren't even aware of a huge incentive (,000 tax credit).

Okay, so now you see the opportunity, and the question that should be going through your mind is, "how do I maximize this opportunity given the challenges outlined above?" Great question!

This is a great opportunity and the Million Dollar Challenge was created to assist Mortgage Professionals and Realtors to take advantage of it. The Million Dollar Challenge is a call to action and a business plan example to help First Time Home Buyers receive ,000,000 in tax credits.

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