By Chris Meade
In 2021, homeowners have found themselves with a surge in home equity, but most aren’t looking to sell. With average listing prices touching all-time highs this year, homeowners recognize that even after cashing in on their appreciation, the current market – brimming with bidding wars and over-asking offers – has priced them out.
Still, many homeowners could significantly upgrade their quality of life by unlocking some of this home equity. The timing is right to market home equity products, but which potential borrowers should be targeted and how can you efficiently plan and execute your campaign?
Your Secret Weapon: Bulk AVMs
Nowadays, blasting out marketing materials to your entire contact list is an outdated approach. Yes, with luck and sheer numbers, you will connect with some for whom your offer was well-targeted. But, you’ll also reach many that aren’t your ideal target, spending more time later on qualifying them as borrowers. And, you’ll waste time and money reaching people for whom the offer makes no practical sense, and they will be left scratching their heads and wondering if your financial institution understands them at all.
There is a better way to run your campaign. The first step is a bulk AVM.
If you’re using the LenderClose platform, this is very simple. Our valuation products offer real-time and bulk Automated Valuation Models (AVMs), which can be leveraged in a multitude of ways, including – you guessed it – assessing, at scale, which homeowners have a significant amount of equity. Since most home equity lending does not require a full appraisal, and our AVMs are sophisticated and very accurate, this is a very efficient way to get started.
From Bulk to Personalized
You can run a bulk AVM on all mortgages three years and older to identify how much equity each homeowner has. From here, segmenting and targeting possibilities abound. Here are just a few examples:
- You might target homeowners with at least $20,000 in equity.
- You might only target homeowners with equity within a certain range that would yield higher, or lower, loan amounts.
- You might target homeowners with certain equity parameters and who have a credit score above X.
- You might target homeowners with both significant home equity and a dwelling older than 20 years for home improvement messages.
Bottom line, “bulk AVM” does not mean “bulk approach.” You can set your parameters to reflect your institution’s loan policies and preferences. Your sales and marketing team will be equipped with very specific, individualized information that can be used to more effectively engage with potential borrowers.
It Pays to Be Proactive
Of course, you can always wait for potential home equity borrowers to do the research themselves and reach out to you. Believe me, this is pretty common. But in today’s competitive landscape, anticipating needs is an important way for financial institutions to distinguish themselves and build touchpoints around meaningful interactions.
And, it certainly doesn’t hurt to blow your borrowers away with a home equity lending experience that is convenient and fast. Seizing opportunities quickly and delivering an exceptional experience should be top of mind for every financial institution today. Do both with a home equity campaign powered by LenderClose.
Learn more about the launch of LenderClose’s Home Equity Express (HEx) feature or book a demo!