Forget about what you’ve known about working with first time homebuyers. There is a new reality—not only on how they view homeownership, but getting them approved and how to market them.

In 2008, 41% of all home purchases where made by first time homebuyers. In the first quarter of 2009, that number was 53% (according to the NAR).

If you are still using the “rent-versus-own” comparison models—throw them away—they just don’t work anymore. FTHB now consider their home a “primary place to live” as opposed to an “investment”.

What’s more, out of that 53% mentioned above, 18% plan to take advantage of the tax credit. But, nearly half, or 48% said they had NEVER HEARD OF THE TAX CREDIT. The balance has said that they don’t qualify because they earn too much money. But wait! Those who said that they earn too much money—they were totally unaware of the “partial tax credit cap of $20,000”. The formula is a little more complicated, but a couple earning $9,000 more than the maximum income amount can still claim a tax credit of $4,400.

According to the National Association of Realtors, almost 70% of first time buyers have rented prior to buying a home. Marketing to apartment complexes is where you will find them. But, there are changes in apartment marketing too.

In some areas of the county, rents are decreasing because of increased vacancy. In other areas, rents have increased. Apartment managers are facing more competition–depending upon the amount of foreclosures! With Fannie and Freddie allowing foreclosed homes to be rented (instead of sitting vacant) and home sellers, (who cannot sell their current residence) offering rent-purchase options, it’s now competing with apartment complexes.

On the other side of the coin, the building of new apartment complexes is at a standstill. Almost 1/3 of all complexes have been built prior to 1970. They are old, out of date, with no money available for updating the units.

Apartment owners have also tightened their “credit standards” and are rejecting almost 20% of rental applications (used to be 8%).

When choosing apartment complexes to market to, you may want to target older complexes. To check for vacancy, you may want to drive around the complex during the evening hours. Check to see how many lights are on—how many cars in the parking lots—how much “stuff” is out on the balconies. (The apartment managers are not going to tell you either).

For more tips on how to market to apartment complexes, check out www.ApartmentToolKit.com.

A Database Is Mandatory

You know that not every first-time homebuyer, who walks thru your door, is going to qualify. One of my niches was marketing to apartment complexes and at any given time, had an average of 800 contacts in my database, who either needed guidance in getting qualified or where in some “stage” of the home buying process. This is where a living-and-breathing database is critical. You will need a system to follow up with potential first-timers whose only cure to buying a home is “time”…time to increase their credit scores, save for a down payment, or find another job.

Each of your contacts has a unique set of “qualifying” circumstances. Creating a “game plan” with your FTHB is you annuity (for future business). The mistake most loan officers make is creating a game plan without the buy in from the client.

Let’s say you have pre-qualified a client and they need to increase their credit score by 40 points AND save money for a down payment. “Hoping and praying” that they will work on their credit score and systematically save money is not a plan. Send a letter or an email where you and the client jointly create a game plan, with specific dates, and then tag each date (in your database) to follow up.

This is the way to weed out the serious buyers from those who hear your advice, yet do nothing. www.ConnectTheData.com is a good resource tool if you need help in setting up an active database.

One last thought….

I recently read an ad from a real estate agent about the $8000 tax credit. Half of the info was dead wrong! If you don’t get the word out thru seminars, apartment complex marketing, articles and interviews with the media, someone else will!

You are missing one half of the purchase market and refi’s aren’t going to last forever!

Contrary to popular belief the whole world is not your enchilada! In other words not very walking, talking human being is your customer. I mean even if you were the only solution left (like you owned all the water) and the only way a person could have some was to pay you, there would still be some in the group who would say: “Hey wait a minute I don’t like water. Do you offer coffee, tea or milk?”

The point is this even if you beg to differ with my analogy, EVEN if everybody could use your expertise and services, there is a specific group that has an INTENSE desire for the solutions you offer. Find that “Niche” market and commit your efforts to getting business from this sector of individuals.

My friend Louise has done an excellent job at this. She knew it was time to build a different game plan. The one she had was OK, it paid the bills, but it was stagnant. The production level was not going up even though she was spending extra hours at the office.

To change her present dynamic Louise took the time to reflect on where she was headed. Adding hours wasn’t producing the desired results. And frankly working more hours was not the solution she was looking for. By following the step outlined above Louise determined she gained the most enjoyment helping persons in the military. After all Louise and her husband have a son serving, and the fact is she is very patriotic. Rather than considering the entire universe her client, Louise narrowed her scope. She began to build a business centered on the veterans moving into her area. And guess what? She loved everyone she was working with so her business became fun instead of draining. Isn’t that awesome!

Identifying a target market makes it REALLY easy for you to develop a message that is tailored to your specific market. In Louise’s niche she understands there is a lot of stress and emotions when of her vets is newly transferred to her area. With some coaching we concluded it would be great if each of her clients would tell their story. What it felt like to be up rooted and how you guessed it! How Louise helped lighten the burden.

Isolate who your market is, figure out their primary concern AND tailor your message to focus on solutions that are relevant to their particular situation. Gets my heart racing just thinking about this stuff! How about you? I would love to hear how you choose to pump up the volume!

Not too long ago I was working with a client who was extremely frustrated with the way her business was running.

Every morning at about 5:30 she gets up, takes her dog for a walk for about thirty minutes and thinks about all the tasks she wants to accomplish in her day. Believe it or not I have been with her on some of these walks as I am an early riser also. While some of what she wants to accomplish has to do with transaction management, most of what my client Jane thinks about is activities that will improve her business.

Like calling five closed clients to see how they are doing or calling one of her referral partners to invite them to lunch. Jane also receives a tremendous amount of joy when she calls to wish someone “Happy Birthday.” It’s just a really fun call for her. Pumped up and ready to go with Starbucks in hand she is ready to take on the world!

But then it seems as soon as she gets to the office, stuff just starts happening. One minute it is 8:00 and the next minute its lunch time. Instead of having lunch with a person of influence, she is eating a sandwich from Chic~fil~A. The phone keeps ringing and the e-mails just keep coming. Lunch time has turned into 5:00 and all of her good intentions went right out the window. Not a single call has been made to closed clients and because Jane did not accomplish what she set out to do she feels frustrated on a good day and defeated on other days.

Can you relate to Jane’s story? Does this have a ring of the familiar to you? Well I like stories with happy endings, so let me share with you what Jane and I brainstormed about on one of our walks. Instead of arriving at the office at 8:00, she now gets there between 9:00 and 9:30. Is she walking her dog later? Nope what she is doing is making her business builder calls from home! And guess what, once she started doing this her day kept getting better and better, because she is now able to accomplish what she needs to keep her business thriving.

Don’t you just love how a small tweak can make such a difference? In our audio session entitled: “Scheduling for Success” we talk about how to get on a path that is right for you so you can manage your day the way you want to instead of your day managing you. Visit us at www.connectthedata.com. Remember to Make Real Connection$ has never been easier ~ all you have to do is Connect the Data!

Oh, database,

Ahhh, database,

Ummmm, database.

This has been the mantra heard in the industry for the last seven years.

We know our business can only improve and yet we hesitate to implement this system.

Why does this project seem so overwhelming?

Why are we not willing to invest in this area of our business?

Many of us are able to wrap our arms around the concept of “Customer for Life” understanding that we must create “Raving Fans” in order to achieve this lofty goal. The challenge comes in when we try to express our uniqueness. What makes working with this team and/or company a special experience? What is the bond that holds this relationship together? All long-term relationships will encounter peaks and valleys; the purpose of the database is to create the glue that will solidify this bridge when these challenges arise.

From the time you close the first loan for your client, it becomes open season because the document is recorded (public information) the solicitations to refinance from other lenders is non-stop. Their marketing is relentless, and if you do not have a game plan in place, the client you worked so hard to obtain is going to go somewhere else for their next loan. If this is not what you want to see happen, lets talk about what can be done in the way of preventative measures.

First: Employee systems must be in place. Each employee has two or three major job functions they are expected to do. Are they clear on what is expected of them, and what the end result should look like at the end of the day? For example:

Originators:

Pre-Qualifications

High Trust Interviews

Annual Reviews

Processors:

Pre-Underwrite Loans

Clear Conditions

Manage Closings

Clerical Assistant:

Type Letters

Manage Calendars

Confirm Appointments

Marketing:

Keep Database

Manage Marketing Campaigns

Run Queries on Rate, Pre-Payments, etc…

Second: Consistency is Key - The process needs to run the same way for each client every single time.

Property TBD:

Client Faxes

Alt. Doc

Run Auto Approval

Schedule Meetings

Pre-Approval Letter Delivered to Referring Source

In Contract:

Intro Letter/E-Mail/Fax to Realtors

Thank You Note to Referring Source

Gift at Formal Approval

Status Letter/E-Mail

Faxes Each Week

Ten-Days Before Closing

Expectations Notification

After Closing:

Quarterly Newsletter

Economic Conditions

Rate Watch Call

Annual Review

Third: Analyze Your Business. What in-flight corrections are necessary? Are you running into emergencies on a daily basis? Why is that? Here are some suggestions on how to shore-up some areas:

Lead Conversion: Run prospect pipeline report weekly, monthly, quarterly. Analyze the patterns. Are your referral sources closing deals or keeping you busy?

Underwriting: Make an extra copy of the approval, place in a separate folder. Review once a month with staff to determine team/investor weaknesses.

Late Closings: Make an extra copy of the Prior-to-Funding Report, place in a separate folder. Review once a month with staff to determine team/investor weaknesses.

Before you can expect automation to work well for you, these areas must be in alignment.

Once you have clarification in these areas, you will be able to communicate what is unique and special about the relationship you and the client are building. This provides the confidence to market and retain the long-term relationships that are the annuity of all businesses.

This about it this way…your database is really the only asset you have in the mortgage business!