One Simple Rule For Buying Mortgage Leads
Many mortgage brokers have been taken to the cleaners by fraudulent people who pose as mortgage lead companies. They get promised the world, send in their check, and never hear from the lead company again - or maybe they just get the run around from that company and end up in a court battle to get their money back. Before you buy leads from a new and unproven source, follow this one simple rule to help save yourself from potential trouble.
Some originators have been completely turned off to the idea of purchasing leads over the internet (or anywhere, for that matter) because of the deceptive practices of a few bad eggs. However, there are also many happy customers out there who get qualified leads from bonafied lead providers.
So how do you tell the difference between a good lead provider and a shady one? There’s one simple rule that anyone can follow, and be right most of the time. It’s called common sense.
Yeah, yeah, I know - too silly and simple. Not to mention, we all have common sense and practice it constantly, right? Hmmm… I wonder. If there were no history of fraud in the mortgage leads industry, common sense would probably tell me that a company that had the appearance of legitimacy might actually be legitimate. However, there IS a history of fraud in the mortgage leads industry, so common sense now dictactes that a little more effort at due dilligence prior to purchase is the wise thing to do.
It isn’t fair (or logical) to label all mortgage lead companies fraudulent, as a sort of guilty by association mentality. There’s an official name for that flawed logic: fallacy of composition. In other words, just because some in the industry have been fraudulent doesn’t mean all are.
What does common sense say to do before buying leads from a new source? Verify the legitimacy of the source. Unless you’re Bill Gates, a couple thousand dollars is probably a good amount of cash. You don’t want to find out the hard way that your new provider is a con artist.
One way to get a good idea of the legitimacy of the lead provider is to ask direct questions and compare answers to readily available facts.
- How long have you been in business?
- What is your official business name?
- In which state are you incorporated?
- Have you ever been sued? If yes, why?
You can look up information on a business online by visiting the official website of the state where the business is incorporated. Also, often times you’ll be able to get this information from the Better Business Bureau in addition to any complaints that may have been filed against the company.
If the lead provider gives you false information about their business, it’s probably a “big red flag”. For that matter, any false information provided by a company trying to sell you something is generally a “big red flag”. That is why checking them out in this simple manner can be helpful. The BBB will also let you know if others have filed complaints against the company, and whether or not they were resolved. Use discretion when looking at BBB complaints - resolved issues can be a good sign. Unresolved are usually another “big red flag”.
Another way to check companies out is to do a search for them on Google, Yahoo, and MSN. Be sure to search on all three as they produce different results. Type in the company name, variations of the name, the company website URL, and the company name in quotes (”mortgage lead company”). This will be 15 to 20 minutes of well spent time.
Common sense also would tell you to be wary of a few things:
- If it sounds too good to be true, it probably is.
- Testimonials can be good, but only if they can be verified. Ask for the phone number or email address of some happy customers so you can speak with them directly. If you get a person on the other end who is basically trying to sell you the product, be suspicious. Don’t be fooled by calling an employee of the company (or perhaps a friend or relative). In other words, testimonials should not be your only source of verification.
- Money back guarantees are only as good as the company itself. A guarantee shouldn’t be considered a factor that makes a company legitimate. Conversely, the legitimacy of the company should be considered the only factor in determining the legitimacy of the guarantee.
- Long-term contracts are okay, if you’ve already established the legitimacy of the company, but otherwise why would you even consider it?
- The company asks you to pay everything up front, prior to lead delivery - red flag? If you haven’t established the legitimacy of the company, then most likely yes. Ask about using an online escrow service, which will hold funds until both parties authorize release. This way the lead provider knows funds are there, and you know funds won’t be released until you get what you are promised. Try Escrow.com, but also be careful of potential escrow scams.
Overall, you should be painting a picture throughout this process. Take everything into consideration before deciding to do business with a particular company. Use common sense and be thorough and you should be able to avoid losses to fraud perpetrators. A good source of leads can be a gold mine to those who know how to work the leads well. Finding the good sources is worth the effort required.