A Primer for How Not to Deal with Rate Shoppers

There are strategies for avoiding selling based on rates and fees.By Brian Sacks

One of the things we all wonder about as originators is how to compete with on-line and other lenders who simply buy the market.

There are a number of strategies for dealing with this like positioning yourself as the obvious go to celebrity originator in your market.

But one of the best ways to approach rate shoppers is to not deal with them at all.
Huh? Yes, you read that correctly. If you know that your rates are never going to beat on-line lenders, stop competing with them.

You can do that by executing the following strategy:

  • Pick a niche.
  • Become the expert.
  • Let everyone know about it.

To put it more simply: Work with buyers who can’t shop. There are two major groups of buyers who simply can’t shop rates and points because they don’t qualify. There is also a third group of buyers who generally won’t shop because they are under a time constraint and will follow the guidance of their attorneys.

The first two groups are buyers who have income or credit challenges. There are a number of non-quality mortgage programs now available to these buyers who don’t fit Federal Housing Authority, Veterans Affairs or Fannie Mae guidelines.

They want a loan and realize they don’t qualify with standard programs.

There are now programs for buyers with very low scores. Buyers who have had a bankruptcy, foreclosure or short sale. There are also programs for buyers who are self-employed or work on commission and have large write offs.

Here’s the formula: Learn these programs by meeting with your non-quality mortgage representatives. Let everyone know about your expertise by writing about it and teaching agents and builders about these programs. Go to the media because these programs are a great story that will get you exposure on TV, radio and print publications. You could even place ads for these buyers online and off line.

The third group of buyers who don’t shop: This group of buyers are those that are referred to you by one of their trusted advisors, such as an accountant, attorney, or financial planner. One of the best groups of clients, I have found, are those going through a divorce.

Generally, when a client is going through a divorce, there is often a home involved and one of the spouses will be leaving the home. The spouse leaving the home may want to buy, while the spouse remaining in the home may be legally obligated to refinance and get the other spouse off the mortgage and deed.

These buyers can be referred to you by their attorneys and their agreements often call for the refinance to be done within a certain time frame.

Start thinking about ways you can be unique and not be judged on the basis of your rates and points. Doing this will immediately help you close more loans, make more money, and finally, have the time to enjoy life.

About the Author: Brian Sacks is a branch manager and originator with Homebridge Financial in Baltimore, Md. Also, he is the founder of TopOriginatorSecrets.com and the author of the best-selling success manual for originators “48 Proven Ways to Immediately Close More Loans”


Related Content

VA Refunds $400M in Mortgage Fees

Wells Fargo Changes Course, Boosts Mortgage Team

Storytelling and Successful Selling