Jack Huntress of HomeBinder: Equity Building is Key to Homeowners’ Hearts
Jack Huntress is founder and CEO of HomeBinder, Burlington, Mass., a centralized home management platform that keeps homeowners connected with mortgage lenders and other authorized professionals. He has a 15-year track record of creating impactful technology solutions for the housing industry. Previously, he co-founded PARCEL, a due diligence reporting platform providing environmental property data, which was acquired by Environmental Data Resources in 2007. As co-chair of MISMO’s Environmental and PCA workgroup, Huntress led XML-based standards for ESA, PCA and seismic reports.
In response to their dwindling refinance volume, mortgage lenders have begun recalibrating their outreach strategies to capture the shift toward purchase and home-equity demand. In this market, lenders with a finely tuned formula for nurturing repeat customers will succeed where others flounder.
However, reengaging customers is notoriously challenging for the mortgage industry. Perhaps that’s due to a misguided urge to connect with potential borrowers about loan products instead of connecting with homeowners about what matters most to them: enjoying their homes and growing their wealth.
Post-close, most homeowners take little interest in actively managing their mortgages. Their priorities lie in feathering the nest and protecting the value of their home. As home equity soars to new heights, a meaningful way for lenders to create a long-lasting connection with homeowners is to meet them where their interests lie: by helping them understand adaptive home value — how their home’s value appreciates over time and how their stewardship, from maintenance to improvements, impacts its worth.
Home value: a curiosity to homeowners
Lenders’ customer retention strategies range from the sublime to the dubious (seasonal gifting, birthday remembrances, persistent email), but the ones that score relationship points deliver value to borrowers and speak unequivocally to their interests. As a data geek, I’ve noticed that nothing captures homeowners’ interest like watching their home value grow. A recent analysis of HomeBinder data found that open rates for emails related to home value were 53%, a spike over the industry standard open rate of 21.6%. That’s because homeowners engage with content that helps them understand their home value and how it changes over time.
As residential property professionals, we sometimes assume consumers’ understanding of topics like home valuation, when in truth most don’t understand how it is derived and why it changes over time. As a result of their limited engagement in home valuation, homeowners become distanced from it until it is time to sell. Nonetheless, homeowners care about home value and there are not a lot of good resources to help them understand and manage it. By solving that problem for them, you can earn a customer for life.
Mortgage lenders with access to tools that facilitate efficient borrower communication and education could leverage these tools to enjoy greater borrower engagement through homeowner-centric communications like actionable maintenance reminders and home value updates.
For example, maintenance reminders motivate borrowers to complete and log home maintenance tasks, while home value updates show how completing these tasks improves their home’s value over time. This ‘action-to-reward’ aspect of adaptive home value can generate lasting borrower engagement by gamifying the homeownership process. These communications are all the more powerful if they contain lender branding and loan originator contact information.
How to hook homeowners with adaptive home value education
Homeowners care about the value of their homes because they care about building wealth, and they care about maintaining their homes because that’s where they live. Thus, it follows that homeowners should care about actively managing their home financing. However, they don’t because it is tedious, boring and they do not understand its relationship to wealth building.
Data indicates that lenders can increase customer engagement by helping homeowners connect the dots between wealth building and home financing. When borrowers are primed to think of equity building in similar terms as they do maintenance — as a task that should be monitored and managed — they will be more open to exploring financing options. And if lenders are already top of mind because they are proactively engaging homeowners about equity building, they have already established themselves as experts in the field and will more likely be the first person homeowners contact with home finance management questions.
Lenders who deliver value post-close are more likely to earn customer engagement that leads to repeat and referral business. Sharing adaptive home value gives lenders ongoing opportunities to provide customers ongoing financial education and support — a selling point particularly for customers with little to no homeownership experience. By initiating recurring engagement regarding a homeowner’s adaptive home value and suggesting actions they could take to improve it, lenders earn customer trust and remain top of mind until the homeowner is ready for their next transaction.
There is ample opportunity for today’s lenders to empower their customers as better stewards of their homes. By helping homeowners track and understand how maintaining their home’s health affects home value over time, lenders establish themselves as reliable subject-matter experts that have earned long-lasting customer loyalty.
(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at firstname.lastname@example.org; or Michael Tucker, editorial manager, at email@example.com.)