WHY PROSPECTS SHOP AND HOW TO MAKE THEM USE YOU.
I had a very interesting phone call the other day from a client who was referred to me by his accountant. He owned a home with his girlfriend and they had just broken up. He need to refinance and told me who had referred him.
The conversation went much like all conversations go with me asking him the value of the home, the amount of the mortgage(s), the current rates. I also asked him about his income , his credit , his debts and his goals.
THEN HE ASKED THE DREADED QUESTION.
I will share a great script with you soon in this article but I answered his question with a few additional questions. When are you looking to settle? Do you both have an agreement in place for the buyout? Has she agreed to it?
One important way to divert attention away from the rate question is to continue to ask good, solid, probing, questions.
Towards the end of our conversation he finally came back around to what is your rate so I had no choice but to answer it. Before I gave him the rates though I asked him if he was ready to move forward today since rates and points change daily. He said yes.
I GAVE HIM OUR RATES AND A LONG ANSWER.
So I gave him our rates and he proceeded to tell me he had gotten a better price from another lender. Now I hope you realize that on any given day you will never consistently have the best price in the market.
I asked him if rate was his only concern when choosing who to proceed with. He said yes. So I immediately told him NOT to use me or the other lender. Instead, I told him to go on-line and search for the cheapest rate.
He would then be able to complete the application himself and pray that he truly would close on time if at all.
I then “EDUCSCARED” HIM.
What the heck is EDUC SCARING? I actually love this term I created so much I may have it trademarked. Eduscaring is providing a borrower with all of the education they need to make a proper decision on who to work with.
It involves explaining points and APR’s. It involves discussing fees. It involves discussing business and MSA relationships.
It basically provides the buyer with all of the information they need to make a proper decision and not get taken advantage of by the tactics of some lenders.
BUT THEN I ADDED ONE ADDITIONAL POWERFUL THOUGHT.
Ready? You might want to even write this one down –it’s that good!
During our discussion he told me he owned an engineering firm locally. So I asked him how his clients decided?
Was his firm the cheapest in town? If I was going to build a building I would want competitive pricing but more importantly I would want a firm that was competent and would do a good job.
This truly startled him and he told – “Yeah- I guess you are right. Let’s make application.”
Sometimes it’s important for your buyers to “hear” it themselves in a way that makes sense to them. You have my full permission to try this and send me an e-mail at firstname.lastname@example.org to let me know how it worked.
BUT WHY DO MOST BORROWERS FEEL THE NEED TO SHOP RATES AND POINTS?
The truth is that we all look alike. We all have pretty much the same programs and generally we all have rates that are within .125% of each other.
I actually created a term for this –THE HEAD OF LETTUCE SYNDROME. If there are two heads of lettuce and they are exactly the same, most people will choose the cheapest one.
To consumers we all look alike. We all sound alike. Truthfully, we all act alike and our ads all look alike.
But there are several ways to stand out and some persuasion tactics you can use to stop those rate shoppers dead in their tracks. So grab your highlighter right now and let’s go thru a few of them.
As I mentioned one of the biggest challenges we have is that we all look alike to consumers and the only question they know to ask to compare us is “What’s your rate?”
When you are an expert in a niche this question totally disappears. The key is having expertise in programs that most other lenders or not offering. You could also have an expertise in working with a certain group that few others can help.
Our company is the top lender in the US for the 203k loan. This loan is very involved and one that buyers rarely shop. Another niche is that of Boomerang Buyers who have had a bankruptcy or foreclosure. There are programs from several sources that offer buyers loans 1 day after a bankruptcy or foreclosure. I cover this entire niche in the Boomerang Expert system at www.Boomerangexpert.com/replay1
These buyers just want to make sure you are for real and that they can come up with the money down and have comfortable payment.
Solve problems and buyers will rarely if ever shop you. Your mission right now is to pick a niche- become the expert – and let everyone know about your expertise.
This is a sneaky little persuasion tactic so keep this one to yourself ok? I always prefer to meet with my clients in person either at my office or at a Realtors office. Many of the loan officers in my office and many of my Top Originator Secrets members just chalk it up to me being “Old School.”
But nothing could be further from the truth. See I like to make my clients invest their time into the pre-approval process. I want them to provide me with their bank statements, income information and have their credit run.
I want to meet them and have them provide this information to me personally. This investment of time and effort on their part makes them much less likely to shop and compare rates. Most people will take the easiest path and since they have now met me and given me their information they are 100 times more likely not to shop.
See there a number of psychological triggers and persuasion tactics that go into converting rate shoppers – I cover many of them and now to implement them in the LO Unfair Edge system at http://lounfairedge.com/1-2/
CELEBRITY AND SOCIAL PROOF
What I am about to share with you is probably not something you will easily admit to but that doesn’t make it any less true. People like to work with celebrities. Your job is to make yourself a celebrity in your area.
Write articles for your local publications.
Have a podcast and promote it on Linked In and Facebook.
Be a guest on local radio shows.
Host your own radio show.
Go on local TV or be interviewed as a resource on the mortgage and real estate market.
People love to work with celebrities and they love to brag to all of their friends and celebrities about working with one. It makes them feel special. When they feel special they almost never ask about rates and points. The photo above is the one I use on most of my marketing pieces and it instantly screams Expert and Celebrity.
THE BEST SCRIPT OF ALL –
This is a BIG IDEA that I use daily with my prospects and is easy to implement if these other suggestions scare you. When a client calls me to ask for rates and points as a pre-qualification before they have found a home I never quote rates.
The conversation generally goes this way- so you might want to copy this down right now. This generally happens after we have gone thru the pre-qualifying conversation about income –assets and credit.
This again is a
Prospect: “What are your rates?”
Me: “Rates on this program have been running between 3.75 and 4.0 over the past 60 days. The market has been a bit volatile and bouncing around.
When you find a home and the seller has signed your contract we can lock in your rates. The rates change daily so hopefully we will be on the lower end when you are ready and we can discuss it then.”
The power of this statement is that it makes the person feel like you have in fact given them the information they requested but in fact you really have not told them.
Brian Sacks is a nationally-renowned mortgage expert who has career closing of more than 5,924 transactions for more than $1 billion. He has trained, consulted and coached, tens of thousands of loan officers and company owners over the past 31 years on how to close more loans, make more money, and still have a life. Brian is the host of “Top Originator Secrets,” which can be seen weekly on Mortgage News Network and on his blog. You can get more information and grab your free report on “How to Get Agents Chasing You” at TopOriginatorSecrets.com