When the consumers change, so should the company. Across the country, there’s a new breed of homebuyers, the millennials, whose aspirations and responsibilities are different from those of the previous generation.
Lending companies should ensure that their LO teams are adept at reflecting the needs, desires, and diversity of this buying class to keep the customer satisfied. Before we analyze the new professional and personal skills loan officers need, we must understand how the buyers have changed over the years
A new class of homebuyers
The earlier set of homebuyers had a stable job, or prospects of a stable income, and were rooted in the same place for longer periods. Whether it was from manufacturing or service jobs, they were confident of an income stream that was relatively free of disruptions. This meant that they had a clearer timeline of when to buy a house, when to get it refinanced, and when to go for a retirement house.
The same can’t be said about the millennials. Their average job tenure is markedly lower. This translates to lesser confidence in a stable income over a long period in the same location. The millennials are also saddled with heavy student debt, which when combined with higher rent means that they are incapable of putting up high down payments. Perhaps due to the information overload, millennials have also been found to be financially less aware than the previous generation.
Other than being young, the new class of homebuyers is also diverse, and with a high degree of social sensitivity. This leads to a dissonance between buyers and loan officers especially when you consider the fact that on average, there’s almost a two-decade age difference between the two groups.
The millennials are also digital savvy and place a high value on online feedback, and brand perceptions. For lending companies, this raises the need for a comprehensive social media strategy encompassing both products and people. So, if this is the construct of the next-generation homebuyer, how should the next-generation loan officer be like to keep the customer satisfied?
Next-generation loan officers
The number one trait of an LO team should be transparency. When dealing with millennials, what the customers are looking forward to is a straightforward discussion. Lending companies must simplify their procedures to make it more accessible and trustworthy. And it begins with listening to the customer.
Companies should train their loan officers to understand the problem and opportunity from the customer’s point of view. They should empathize with the buyer’s circumstances, and explain to them all the possible financing options. This means way less jargon and way more openness, and no hiding behind fine print. They should keep in mind that the buyers may not be financially savvy, and therefore may need detailed explanations.
Mortgage companies and loan officers should also regularly analyze their online presence and ensure that their brand equity stays desirable, trustworthy, and welcoming. They have to constantly lookout for any negative reviews, rectify them, and encourage positive feedback. As they are dealing with a digital-first customer base, loan officers should bear in mind that most of the conversations happen before they ever meet the customer. Companies should also encourage their teams to reduce the number of physical documents the customer has to see and digitize as many as possible.
Above all, to keep the customer satisfied, the loan officers should be well-versed in handling a diverse client base. Ideally, the team members should also be from an eclectic background with multi-lingual skills to foster greater connections and reciprocity. Millennials are more likely to go with businesses that value and respect diversity.
These are exceptionally active times for the home loan industry. To make the most of it, companies should ensure that their team of loan officers are individuals their customers can identify with, and do business with.