Rain City Guide

Apply to refinance online and get 50 calls a day for months

Russ on 12 2, 2005

I called a prospect whose name I purchased from a lead vendor. This is something we do regularly in the mortgage business. Rather than word of mouth, mailing, cold-calling, or some other marketing means, we can purchase the names, phone numbers, and other relevant information from a lead vendor. These leads come in various qualities and prices. You can get thousands of random names and phone numbers for pennies apiece or you can get interested, very specific parameter, live transfer calls directly to your phone for $150 or more each. Of course, there are leads for everywhere in between as well.

One of the most difficult factors in buying leads is the “exclusive” lead. Exclusivity in the lead business means once they sell it to you, they won’t sell it to anyone else. The non-exclusive leads can be sold many times. The problem with exclusive leads is they can only verify the lead is exclusive to their company. The prospect may have gone to many different websites. Even though you may pay $80 for an exclusive lead, you may be getting a lead that has already been called 100 times.

Back to my client. I called this “lead” and was told that he went online and put his information on one website. He then received over 30 calls in one day. I think I was probably the 50th person to call. By the time he spoke to me, he was no longer interested in talking to anyone. This is a great indicator of the recent shift in the mortgage business. During the Refi Boom of 2001 and 2002, you could hardly even get people to call you back. Now, unless you are one of the first people to return a call, you will most likely lose out. As the rates are climbing and demand for refinancing is falling, the purchase market is becoming more important to mortgage brokers. The biggest headache with internet purchase leads is the clients may not be ready to buy a house for months.

Once we pre-approve a client, they start shopping for a house. If they don’t find anything they like, it can take a long time before that lead becomes actual money in our pockets. Because of this, the internet generated refinance lead business is very hot. And it is also very challenging. It is quite common to pay for a “mortgage lead” which is 1 or 2 days old and find out the prospect never went online or submitted their information months ago. Lead vendors will usually give you a credit for these leads but getting more bad leads in exchange for the original bad leads isn’t much help. In the end, the best way to develop business is relationships and referrals. These are long lasting, benefits everyone involved, and generally produces the highest quality leads available.

About the Author: Russ Shulman

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Russ is the owner and designated broker of Trusted Home Mortgage located in Seattle.