Homeowners looking to refinance or get a home equity loan need their home value just as much as someone looking to sell. So it should come as no surprise that some leads you receive are in a refinancing frame of mind. “But this is a refi lead,” you say, “it’s useless to me!” If we had a quarter for every time we heard that from a real estate agent, we probably could have retired by now!

If there is one mindset an agent should have it’s this: that NO lead is a useless lead, EVER. Every prospect has the potential to lead to business for you, whether it’s business from the lead itself or someone the lead may have referred to you. That includes refinancing leads. First off, even a refi lead is one more person to talk to and add to your sphere of influence, possibly even get referrals from. Let’s play ‘what if’ for a second. What if the lead is looking to refi, but has a sister looking to sell? What if the lead is looking to refi, but has considered buying a vacation home? What if the lead thinks they want to refinance, but really knows nothing about it or whether refinancing even makes sense for their situation?

You’d never know about ANY of that if you trash the lead immediately as being useless. At the very least you need to take the time to get in contact with the lead and learn more about them. We’ve had agents wind up with listings thanks to referrals from supposedly useless refi leads. We’ve even had some agents take the time to educate their leads on what refinancing entails and then turn around and convert that refi lead to a seller! It doesn’t happen often, but it DOES happen. The important thing is to speak with the lead and get a feel for their situation. If they’re set on refinancing, then it’s time to refer them to your mortgage broker. Are you seriously still wondering how that does you any good?

An agent that has a great working relationship with a mortgage broker will never say, “A refi lead is worthless to me.” They know better than that and they understand the benefits they can reap by working closely with a loan officer. After talking to the lead and determining that refinancing is truly what they want to do, let them know you have a great loan officer that they can work with and that you’ll even go the extra step in getting their information to the broker to start the pre-approval process. If the lead is refinancing to add on to their home, find some listings that match what they want, and bring them along when you return with their approval for a refinance. Your loan officer shouldn’t mind, because even if the lead winds up buying a new home instead of refinancing, they can go through the officer to get a home loan!

You should be sending every refinance and buyer lead to your mortgage broker. Although it is ILLEGAL to get a referral commission for this, there is no reason the loan officer can’t return the favor. If they’re not sending you buyer and seller leads, than you need to GET A NEW LOAN OFFICER! This relationship should be in the nature of “I scratch your back, you scratch mine.” It’s also in your and the lead’s best interest that you work closely with a loan officer rather than a bank. A loan officer simply has more resources and can provide different programs for various situations.

Recommendation: If you do not have a relationship with any loan officer, it’s time to pick up Homes & Land, Harmon Homes, or any other free real estate magazines and start searching out all the ads for loan officers. Once you have a good sized list, start calling them all to introduce yourself. Let them know you’re looking for someone to send a bunch of leads to. Then just shut up. 99.9% of the time the loan officer will be excited about the opportunity and say yes, so you can start negotiating a partnership. You can work out a one to one ratio, so that for every ‘favor’ (aka lead) you send them, they send one in return.

Refinance leads can be a goldmine if you’re willing to work them right. Even after they’re referred to your loan officer, you can add them to your mailing list and follow up with real estate information, or even credit and loan information if you want to be REALLY effective. The may be refinancing today, but that doesn’t mean they won’t buy or sell within a few years. With regular follow up and contact, even refinance leads can be an AMAZING source of business for you.