Pre-approval leads for loan officers: what is for sale

Search for pre-approval leads and you will find job postings, a state housing programme and a lot of general advice. Almost nobody has written the page.

There is a reason for that, and it is inconvenient for anyone selling leads. A true pre-approval lead is not a thing that can be sold.

Why nobody can sell you a pre-approved borrower

Pre-approval is an act performed by a lender, inside that lender's system, against a credit file and submitted documents. It produces a letter with that lender's name on it.

It is not an attribute that travels with a consumer like a phone number. It belongs to whoever issued it. So the question behind the search, can I buy borrowers who are already pre-approved with me, has a clean answer: no, because the pre-approval is the thing you do.

What does get sold under that heading is one of two things, and they are very different.

The distinction most advertising blurs

Pre-qualified and pre-approved are used interchangeably in marketing and mean different things on a desk. Getting this straight is the most useful thing on this page.

• Pre-qualification rests on what the borrower says. It can happen in a conversation, it is fast, and it is an opinion.
• Pre-approval rests on a credit file and documents. It is slower, it is yours, and it produces something an agent and a seller will act on.
• A lead can only ever be the first kind, at most. Everything on a lead form is self-reported, including on ours. A vendor implying otherwise is describing a business they are not in.

We take that apart properly in what pre-qualified actually rests on, including why a lead vendor running real credit checks would be telling you about it rather than hiding it.

If what you want is more pre-approved buyers

Which is usually the real goal behind the search. Two routes, and they compound rather than compete.

• Buy purchase leads early and convert them yourself. Slower per lead, and the pre-approval that comes out of it has your name on it. The National Association of Realtors puts the median home search at ten weeks, so expect the relationship to start well before the application.
• Build agent relationships. Agents send clients to lenders whose letters they trust, and that flow costs nothing per lead. It is also somebody else's pipeline, which is exactly why desks buy leads alongside it rather than instead of it.
• Measure the pre-approval, not the funding, in the first quarter. Purchase spend judged against funded loans in the same month measures your patience rather than the source.

Source: National Association of Realtors, Profile of Home Buyers and Sellers, on median weeks searched. nar.realtor · Market median describing consumers generally, not a measurement of any vendor's file.

What we could not source

• There is no published figure for how many purchase leads already hold a letter. Vendors do not report it and the question is rarely asked on a form in a way that would survive scrutiny.
• There is no study on conversion from bought lead to issued pre-approval. It is the metric that would actually settle purchase lead buying, and no primary source exists.
• We do not publish our own pre-approval rate. We do not have one to publish: the pre-approval happens in the client's system and most delivered leads never get a status pushed back to us, which is the same reason our closing figures are client self-reports.

Where we fit

We sell the first row of that table, purchase leads early in the search, and we are the wrong answer if you wanted the second.

• One lead goes to exactly one client. That sentence is the whole meaning of the word exclusive.
• Screened against our criteria, which are ours and fixed. A lead that misses them is never delivered and never billed.
• Delivered while the consumer is still on the page. Median delivery under one second, and 97 of 100 inside ten seconds.
• Phone verified on our landing page leads. A check on the contact detail, not on the financial picture.

Related reading: where to buy purchase mortgage leads, and the follow-up schedule, which matters more on purchase than on any other line because the timeline is longer.