Dave: Based upon the questions I receive, this issue is a common one for many loan officers not only with the recent rate increase, but also every time rates go up. And there is no way that you will prevent every one of your prospects from shopping in a rising rate market. But you can affect the behavior of many. You start by developing trust. How do you do that?
Start by getting to know your clients. The deeper you go, the more likely you will develop a relationship. And you can’t develop trust without a relationship. During this process you must also establish yourself as an expert that delivers value.
For example, if you only send them news articles about rates going up, that is not value. It is likely to be seen as self-serving. But if you have been educating them since the beginning of the process, it is more likely to be seen as genuine. And this education will help you with the next step in the process: delivering advice (I will write more about this in a future column).
Even though you can’t prevent all clients from shopping, if you develop a relationship and establish yourself as a valuable expert interested in meeting their deeper needs, you will prevent more from shopping.
How might you do that? Here is one example. Many Millennials are purchasing their homes later in life—even in their 40’s. So, you are not only educating them about home ownership and the first-time buyer process, but also working with someone who should be thinking about retirement.
If you bring up options such as 20-year and 15-year loans, you can get into a conversation regarding how the home could become part of their retirement plan. Getting them thinking about an option other than a 30-year fixed loan is important for their long-term strategies. Perhaps they nix the idea. But as rates rise you can show them how they can still get a lower rate and also build equity quicker. If the 15-year payments are too high, you can show them how a 20-year is actually a more efficient instrument to build equity. If you started this conversation before rates started rising, you would have established your expertise at the right time.
Dave Hershman is Senior VP of Sales of Weichert Financial and the top author in the mortgage industry. Dave has published seven books, as well as hundreds of articles and is the founder of the OriginationPro Marketing System and Mortgage School – the online choice for expert mortgage learning and marketing content. His site is www.OriginationPro.com and he can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..
