4 States; 4 Realtor Associations; 4 Questions (part 2)

Four realtor associations from states with the highest credit union mortgage market share offer advice on how to build credit union-Realtor relationships.

 
 

Credit unions captured a near-record-high portion of the mortgage market at midyear — 7.6%. What’s more, only 40% of the mortgages the industry originated as of June 30 were refis, yet market share held steady. This flies in the face of the common belief that credit unions are better at capturing refinance business than purchase money mortgages.

Last year, four real estate agents representing state realtor associations from Pennsylvania, Texas, Michigan, and Florida offered their input on the lay of the land and how credit unions could capture more market share.

Here, four more agents from Vermont, Iowa, Rhode Island, and North Carolina — states that rank among the top 10 for highest credit union mortgage market share — provide tips and predictions for 2015

state leaders in Credit union
first mortgage origination market share
Data as of December 31, 2013
© Callahan & Associates | www.creditunions.com

  State Abbreviation Credit Union First Mortgage Market Share
1 Alaska AK 28.65%
2 Vermont VT 23.38%
3 Iowa IA 15.68%
4 Wisconsin WI 14.92%
5 Rhode Island RI 13.08%
6 Idaho ID 12.69%
7 Utah UT 10.20%
8 New Hampshire NH 9.54%
9 North Carolina NC 9.29%
10 Michigan MI 9.02%


Source: Callahan & Associates

Up First, North Carolina >>>


NORTH CAROLINA

Tony Smith
President elect, North Carolina Association of Realtors

What is the real estate market like in North Carolina?

Tony Smith: It is stable, but we’re still in recovery mode. We had an uptick in spring and early summer, and the major metro areas like Raleigh, Charlotte, Greensboro, and Winston-Salem have had times we've said are good. It's still a little shaky in some of the resort areas like the mountains and the coasts, but in general, North Carolina is stable and will continue to improve.

Reach out to the selling agents and ask if they were happy with the experience.

What is your outlook for the market in 2015?

TS: I’m optimistic. Some first-time homebuyers have left the market because of lack of inventory and possibly financing, but there’s also an uptick in building permits and new housing starts. If unemployment tracks down and if interest rates hold, then I think we can have a better year in 2015 than this year. The stars have to align, but I’m optimistic about it.

How visible are credit unions as mortgage lenders in the market?

TS:The credit unions are vocal. If you are a seasoned real estate agent, you know the credit unions in the Charlotte metro area. If a client says they are working with a credit union, I say excellent. The work to get to the closing table doesn't seem as complicated with credit unions because of the relationships they have with the buyer. Credit unions are an untapped resource and we don't use them like we should.

However, I think buyers don't understand that in some cases they don’t have to be a member of a certain group to be a member of the credit union.

How Do You Compare?

Find out what institutions in your area are stealing your mortgage market share. Then use that data to gain it back!

Learn MORE

 

How can credit unions better work with real estate agents in their area?

TS:I hear from three or four lenders a week. Credit unions, from a marketing standpoint, are not that visible. They could have better marketing and let consumers knows they can be a member, especially if they don't have to be a teacher or government employee or whatever.

It is just as important to market to real estate agents. We tend to find people we like who give us good service, and we go back to those people. But I give people an opportunity. If a transaction goes smooth when I am the listing agent, I note that. So reach out to the selling agents and ask if they were happy with the experience. It’s just good old sales and marketing.

Next, Rhode Island >>>


RHODE ISLAND

Robert L. Martin
President, Rhode Island Association of Realtors

What is the real estate market like in Rhode Island?

Robert Martin: It’s static. The quarterly and year-end median for volume and price are within five points of this time last year. Year-to-date sales are in line with this time last year. Overall, it’s an improvement over 2011 and 2012, but the past couple of years have leveled off.

There’s more consumer confidence, but lenders are a problem at times. Lenders tightened credit in 2007 and 2008 because after the bubble burst they had to buy back a lot of mortgages and now they’re being more cautious. Credit isn’t tighter since last year, but lenders are more restrictive than they were seven or eight years ago.

My experience with the credit unions is they are 9-to-5ers. Even the large banks have done away with that.

What is your outlook for the market in 2015?

RM: I expect to see more sales and a modest increase in prices in Rhode Island. We have 7.6% unemployment, which is the third highest in the country, but that’s down from 10% three months ago. So overall, we’re adding jobs and the economy has strengthened. There is pent-up demand from people who have put off a purchase. People realize they’ve missed the very bottom — the lowest prices at the lowest rates — but they might as well get into the system while it’s still very affordable. There’s more upside pressure than downside pressure.

How visible are credit unions as mortgage lenders in the market?

RM: We have two or three that are very active, particularly one in northern Rhode Island. Credit unions are a good alternative and a viable part of the marketplace. We like dealing with them, particularly for nonconforming mortgages, because they are easy to work with. We can speak with a human being and if there are compensating factors, they’ll say ‘it’s not sellable, but we’ll look at it.’ It might be a round peg in a square hole, but if it's a good mortgage, they’ll make it.

How can credit unions better work with real estate agents in their area?

RM: Even locally where we have good relationships, the credit unions in general haven't adapted to the flexibility that other lenders have. For example, we deal with a mortgage broker whose attorney more often than not will come to my office and close and not insist we go to the attorney’s office. And originators or application takers set up after-hours appointments. Probably three nights a week I have an originator here at 7 p.m. or I pick up paperwork on a Saturday morning. That’s were I find credit unions to be inflexible. My experience with the credit unions is they are 9-to-5ers. Even the large banks have done away with that.

Also, credit unions could do more volume if they went out to the community more. I’ve never in 30 years had a credit union person come to my office and say, ‘we’re in the mortgage business and here’s what we can do with rates.’ You might see flyers and television commercials, but they don’t reach out.

Next, Iowa


IOWA

Kathy Miller
President, Iowa Association of Realtors

What is the real estate market like in Iowa?

Kathy Miller: We are up for the year in sales.

What is your outlook for the market in 2015?

KM: I think we’ll see our market continue to rise and get back to where it was in 2008 when we had the downfall in the housing market. But it's slow progress. In some parts of the state the market is softer than in others. In Sioux City, where I am, sales have been lower but prices have been fine. Des Moines is continuing to grow and building is good. It’s the same in the Davenport area. Those are three markets that represent the northwest, middle, and east side Iowa.

The real estate game is all about relationships, buyers-to-realtors and realtors-to-lenders. Look at us like we’re the customer.

How visible are credit unions as mortgage lenders in the market?

KM: We’ve got several credit unions that stand out in the Sioux City market. They’re on top of everything, and they have good rates. Sometimes they can be more flexible than the banks. For example, if you’ve got an A buyer versus an A+ buyer and bank turns down the A buyer, the credit union can still do that loan.

The credit unions offer a lot of the same types of products as banks, which is a good ting, but they also offer some in-house products that are a good option if you have a buyer that can’t go into the secondary market.

They do a good job of reaching out in Sioux City and not just during a holiday season or what have you. They contact us every few months and ask, ‘what can we do for you, what's working, what can we do differently?’

How Do You Compare?

Find out what institutions in your area are stealing your mortgage market share. Then use that data to gain it back!

learn MORe

 

How can credit unions better work with real estate agents in their area?

KM: I think like everything else in real estate, you have to touch people one way or another. Don't just send a note in the mail; call up your local realtor estate agents. Take them a bagel once in a while or a cup of coffee. It doesn’t have to be much. The real estate game is all about relationships, buyers-to-realtors and realtors-to-lenders. Look at us like we’re the customer.

Next, Vermont


VERMONT

Isaac Chavez
CEO, Vermont Realtors

What is the real estate market like in Vermont?

IC: If you want to do a simple year over-year-comparison, September 2014 compared to September 2013, we were up 3.4% in closed sales. That’s a decent increase over a year ago. We have more deals going through. The median sales price dropped 2.8% YOY in September.

We don’t have the same kind of swings in Vermont because we are so small, so our real estate market stays relatively stable. We don’t have increases or decreases of 10-15% very often. We were hit during the downturn, of course, but have been recovering over the past two years and the market is picking up in categories like sales, inventory, affordability, and days on market.

One way to solidify a partnership is to invest some marketing dollars to sponsor the state realtor conference. State associations are the gatekeepers for the agents.

What is your outlook for the market in 2015?

IC: I’m cautiously optimistic. Overall, the housing market is doing great. But property taxes and government-mandated costs prevent the housing market from completely recovering.

Vermont has the third largest property tax behind New York and New Jersey. Our property tax went up 10% this year and it is forecasted that that will happen again next year. This has a negative effect on first-time homebuyers because taxes are pricing first-time homebuyers out of the market. They get approved for $150,000 for a starter home, but when they find one, property taxes almost double the monthly payment and the house isn't affordable anymore. They’re buying power shrinks dramatically. So young buyers give up and rent or stay with parents. This is no longer anecdotal. We see it over and over, that’s why we decided to step in. As an association, we’re trying to reform the property tax system.

How visible are credit unions as mortgage lenders in the market?

IC: Very visible. There are only 700,000 people in the whole state, and because it’s a small state, the credit unions have a huge presence. I don’t see banks like Wells Fargo, Citibank, or Chase here. We have local banks, regional banks, and credit unions. Vermont State Employees is everywhere and all residents of the state can join; North Country FCU is a big one, too.

Credit unions have started offering green mortgages to capitalize on what it means to be from Vermont. In Vermont, everything is about the environment and being green. It’s all about organic lifestyle and sustainability. It’s a big deal if you offer green mortgages because people are doing what they can to make their houses more energy efficient. That gives the credit unions a leg up on traditional banks.

How can credit unions better work with real estate agents in their area?

IC: The credit unions in Vermont are visible and offer products for buyers, but I wouldn't say they've gone out their way to develop relationships with the real estate associations. We have conferences and symposiums every year and in the past three years as CEO, I haven’t been able to get a credit union to sign up as a sponsor.

One way to solidify a partnership is to invest some marketing dollars to sponsor the state realtor conference. It shows realtors the credit union cares enough to have a presence so it must know what it’s doing and the state association must think highly enough of the credit union to have it be a sponsor. State associations are the gatekeepers for the agents. Credit unions can reach a lot more people if they work through the state associations. It’s not cheap. Credit unions have to make a conscious decision to set aside the money to reach the realtors, but they get a return from it and further their reach.

It also doesn't hurt to offer incentives like a relator appreciate week or go to a realtor meeting and hand out knickknacks. Real estate agents love free food and stuff like that. Set aside a day where they can come to the credit union for free hot dogs and to meet the branch managers. Those things go long way in building rapport.

Update: Nov. 13, 2014

Credit unions across the United States are exploring new strategies to build stronger relationships with local real estate agents. According to Cindy Morgan, senior marketing executive with New England Federal Credit Union ($1.0B, Williston, VT), NEFCU has three dedicated staff positions to keep selling agents up-to-date on the mortgage process, conducts seminars on lending guidelines and how they affect the housing market, and offers a Realtor Road Map to help agents understand the credit union’s process and ensure a quick, efficient closing. NEFCU also makes an annual holiday donation in the name of the Northwestern Vermont Board of Realtors to its charity of choice, COTS, and is a platinum sponsor of the NVBR conference.

Efforts like this have helped the credit union become the No. 1 mortgage producer in Vermont and come in at No. 37 nationally for mortgage production among credit unions. The credit union was also named the 2014 NVBR Affiliate of the Year.

 

 

 

Nov. 3, 2014


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