Emotionally, shopping for a home is a mixed bag for most homebuyers—exciting, overwhelming, fun, stressful, satisfying, and draining. It’s one of those things you tend to be grateful for after the experience is finally over. 

And since talking to a lender is one of many conversations the buyer will have, it’s not surprising that over half of American homebuyers (54%) get only one lender offer. Decision fatigue is real.

That’s according to the newest LendingTree study, which also reveals that 45% of homebuyers who did get more than one lender offer ended up saving money. 

Plenty of agents, unfortunately, build a relationship with only one local lender and recommend that lender to all their buyer clients. And one of the reasons so many buyers get only one offer is they talk to the one lender specifically recommended by their agent. 

Fair. But what isn’t fair is limiting your clients to only one offer if you can save them some serious money by providing more options. 

Sure, most lenders would probably prefer that you recommend them and only them to your buyers, presenting them as the best option around. 

But as you already know, you don’t work for the lender. 

With that in mind, read on for three strategies you can use right now to increase loan capture by putting your clients first. Then tune in to hear Byron Lazine and Tom Toole discuss the report on last week’s Knowledge Brokers Podcast (starting at 21:48).

One in two homebuyers get only one loan offer

Lazine started this segment of the conversation on the commitment he and fellow Knowledge Brokers Toole and Chinatti have to ensure each of their buyers are getting the best possible service from the financing sector of the industry. 

One of the ways they ensure this is by giving them multiple options. Because the fact that over half of buyers (54%) are not shopping around is a real issue. 

There are two things happening here. And both work against the consumer: 

  1. Buyers are choosing to get an offer from only one lender
  2. Agents are only giving out one name

Those two are related, as mentioned earlier. But there are three things you can do as an agent to help your buyers save money on their home. And that savings can make a real difference. 

So, how many offers should you encourage your buyers to get before choosing one? According to Jacob Channel, LendingTree senior economist, there’s no magic number. But talking to at least two lenders can yield surprising and even life-changing results. 

Different lenders can offer different rates to the exact same borrower. With that in mind, the first rate you’re offered may not be the lowest one you can get. The more offers you can look at, the better.

Jacob Channel

LendingTree senior economist

Read on for three strategies (based on a customer-first mindset) that can help you increase loan capture.

Agent strategies to increase loan capture by putting the customer first

#1—Build relationships with multiple lenders

As experienced agents and team leaders, Lazine and Toole both know the value of matching the right person to each deal. And in the financing sphere, that means building relationships with more than one lender in your area. 

When you’re focused on creating the best client experience, you’re more likely to shop around on their behalf. Lender competition is something to leverage—not avoid. 

In this market, I couldn’t work with a lender that’s overcharging… It’d be hard to find a lender charging unnecessary fees when you know you need to be competitive. Because the rate’s not doing you any favors…If you have any common sense and you’re just comparing what one lender is doing to the other, you’re going to eliminate any ‘junk fees’ off of competition. It’s a very competitive environment right now for lenders.

Byron Lazine

Toole recalled conversations he’s had with lenders who gave him a hard time over giving out two names to his buyers rather than just one. 

I’ve got to worry about the consumer. And sometimes, some lenders have better products—and it could flip based on the loan portfolios available… This is a big financial transaction. You want to make sure people are getting a good price on what they’re buying.

Tom Toole

#2—Present your clients with multiple lender options

It’s worth repeating: You work for your clients. And the more you put them and their interests first, the more likely they are to trust you and to take to heart the education you’re offering them. 

You know you want the best for your clients, but they don’t know that until you show it. One of the ways you do that is by presenting multiple options for mortgage lenders and being transparent with what you know about each one.

According to the LendingTree study, among borrowers who obtained only one mortgage offer, 20% went with the (one) lender their real estate agent recommended. And 57% of those with a mortgage on their current home met with an agent before they met with a lender. 

So, give your buyers at least two lender options, and encourage them to have multiple conversations to determine which lender is best for them

I tell the lenders I work with, ‘The goal is for you guys to compete against each other. The goal is for us to get two names at least to every customer so that you both have to sharpen your pencils. Just by me making sure they have to sharpen their pencils and compete head to head, that takes junk fees out of the equation right there.

Byron Lazine

Presenting multiple lender options can pay off in a big way for your buyer clients. 

Just how big that payoff could be will depend on multiple factors, such as the rates offered and the size of the loan. But it’s possible for a borrower who receives more than one offer and who picks the one with the lowest rate to save hundreds of dollars a month, thousands a year, and tens (if not hundreds) of thousands over the lifetime of the loan. 

For most people, that kind of savings makes a big difference. 

Because savings can be so large and you can compare lenders for no charge, pretty much everyone should at least try to shop around before they get a mortgage.

Jacob Channel

LendingTree senior economist

Lazine shared his advice for both sides of the agent-client conversation on lender options:

Consumers, it doesn’t hurt you to take a second look; it’s just time. Sometimes people come in, and it’s like ‘I got my bank / Federal Credit Union, and that’s who I’m going with for my mortgage.’ Take a second look. You might be surprised by what you see on the other end.

On the flipside, agents, if you’re only giving one name because you just love your lender so much—like you’re incapable of creating a second relationship that’s just as good—I challenge you on that.

Byron Lazine

As Lazine explained further, the more you do what’s best for your clients, the more clients you’re going to have—and the higher your retention rate. The customer-first mindset breeds more deals over time. 

So, you’re ultimately doing your lenders a bigger favor by putting your clients first. 

#3—Educate your buyers on loan options

Leverage those relationships with lenders to learn about available loan options and the advantages and caveats that go with each. Then educate your buyer clients on those options when you have that conversation about local lenders. 

For your client’s sake, get better acquainted with different loan types. That way, the more you know about a particular buyer’s situation, the more you can help by encouraging them to discuss specific loan types with lenders in the area. 

Because while 30-year loans might be the most popular, your buyer might be better served with a shorter-term loan or an adjustable-rate mortgage (ARM). 

You can also explore government loans, including those offered through the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), and the U.S. Department of Agriculture (USDA). 

You also want to look at different types of lenders, the three most common being banks, mortgage brokers, and mortgage banks. Know all the options available in your market so you can present the best options to your buyers. 

As Lazine and Toole both know as brokerage leaders, some agents are better suited to a particular deal than others on the team. And giving each client the best possible experience means assigning the best agent for the client. 

The same customer-first mindset applies to the best agent for the deal as much as it applies to giving your buyer multiple lender options and encouraging them to get two to three offers before choosing one. 

I’m doing what’s right for the deal. And oftentimes when we hand out leads, too, [it’s] best agent for the lead—not ‘Is it your turn?’ Your turn is irrelevant if the customer is a better match for another agent.”

Byron Lazine

When you have a customer-first mindset, you usually win long term.

Tom Toole