Time to Rethink Your Position in the Homebuyer Lifecycle

By Mike Corn04.14.2014

For most people, buying a home doesn’t happen quickly.

On average, it takes about 18 months for today’s homebuyers to complete the process, from first thinking about purchasing a home to signing on the dotted line at closing. Seems like plenty of time for your credit union to pitch its mortgage services, right?

Wrong.

Potential homebuyers spend weeks researching properties, studying neighborhoods, and touring open houses—and that’s before they start house hunting in earnest and thinking about mortgages. Still, many banks, realtors, and lenders are competing for their business right from the start. And if your credit union hopes to boost its purchase mortgage business, it should be among those connecting with home buyers early in the process.

The Right Fit

When it comes to buying a home today, the old way of doing things won’t cut it anymore. The Internet—where 56 percent of homebuyers start their search—has changed the game. This shift offers your credit union a great opportunity to become the First Point of Contact™, capturing buyers’ interest online, ahead of anyone else.

Research shows the home-buying cycle is broken into four stages:

  • Discovery—uncovering opportunities to buy or sell, beginning passive home search
  • Research—determining needs, beginning active search, connecting with agent
  • Selection—narrowing home choices, determining lending options
  • Closing—finalizing the transaction, taking possession of home

Traditionally, information about mortgage financing didn’t enter the picture until buyers were narrowing their home selections and exploring lending options (Stage 3). But today, more credit unions are positioning themselves as the first point of contact, expanding their messaging beyond mortgages to include a broad range of real estate services and resources. By moving their messaging earlier in the cycle—to the identified “sweet spot” between the discovery and research stages—these credit unions are seeing their purchase mortgage volumes grow, some by as much as 40 percent.

The Right Resources

More credit unions are also finding success in providing the real estate tools and information buyers’ are looking for directly from their websites. It takes a mindset change—a shift from being simply a mortgage provider to being a comprehensive real estate services provider. Consider enhancing your website with tools like MLS home and neighborhood search capabilities, realtor referral networks, online calculators, funding applications and educational articles. Another welcomed resource for would-be buyers: onsite seminars presented with local agents who can speak to buying trends and the market activities. 

The Right Relationships

While the Internet has replaced real estate agents as the first “go to” contact for many in the home-buying process, realtors are still involved in the vast majority of home purchases. According to research from the National Association of Realtors, 88 percent of buyers in 2013 bought their homes through a real estate agent or broker. Of these buyers, 87 percent considered their agent to be a useful resource. Add in the fact that many play a key role in directing buyers to preferred lenders, and the importance of credit union-realtor relationships becomes clear. Not only will buyers appreciate your assistance connecting them with trustworthy realtors, these agents can provide valuable referrals to your lending programs.

Purchase mortgages present a ripe opportunity for today’s credit unions. As the housing market shifts away from refinancings, credit unions are wise to reposition themselves in the eyes of homebuyers. To grow purchase mortgages, it’s more important than ever to connect with buyers before key decisions have been made.

Mike Corn is president and CEO of CU Realty Services, a CUSO that helps credit unions nationwide increase their purchase mortgage business by becoming the first point of contact when buying or selling a home. Contact Mike at mike@curealty.com or visit www.curealty.com.