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Index  Spotlight Article Niches |
| Why Do Rate Shoppers Shop? |
| April 09, 2007 | |
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One of the biggest frustrations we all have as loan officers is the constant bombardment of callers who want to know our rates, points and fees. In this article I will explain to you why they ask these questions and some strategies you can use to deal with them and more importantly drive prospects to you who will not ask this question. Whether you realize it or not we are selling money and have become a commodity very much like the insurance, automobile and other commodity type businesses. Look around at your newspapers; listen to TV and radio commercials and open your mail every day and you will see numerous ads for mortgages. Just the other day I was walking by an H & R Block office and saw a big ad in their window for mortgages. If you ever have a chance to drive up I-95 you will see sign after sign offering mortgage loans with some actually having the rates on them in lights. Every week in your local paper you will see 20 lenders all giving their rates and points for shoppers to view.So it is no wonder that when a buyer calls you the only question they know to ask is “What are your rates and fees.” There are numerous scripts and detailed ways to handle this question, however I would like to devote this article to attracting buyers who never ask this question to begin with. While I travel the country speaking and training loan officers I always ask the question, “What do you do for a living?” The common responses are, “ I am a loan officer.” “ I lend people money to buy a home”, “ I help people achieve their dream of homeownership” Etc. If you were to ask me what I do for a living my response would be “ I help buyers who have had a bankruptcy or other credit issues get into a home with very little money down and attractive rates.” This illustrates one of the keys to attracting serious clients instead of simply rate shoppers. The key of course is to pick a niche, and become known as the expert. Take a minute to think about this. Suppose you have a toothache and are advised by your dentist to go to an oral surgeon as soon as possible. Now remember you are in a lot of pain so you have a problem and need to get it solved immediately. I would guess that you are expecting to pay more for the services of the oral surgeon than the dentist. I would also guess that you are not going to call 3 oral surgeons and try to find the one who charges the least or expect to meet that oral surgeon on Sunday afternoon or Wednesday evening at 8:30 pm. Instead of being a generalist you must strive to pick an area where people have a problem and need your help to solve it. Some of these niches could be 103% loans, reverse mortgages, no-doc for the newly self-employed, construction perm loans, etc. You also maybe able to work with first time buyers who can take advantage of local grant products. One of the other responses I hear from loan officers is that they provide excellent service and that is what sets them apart from everyone else. Honestly, people do not know if your service is good or bad until AFTER the transaction closes. Good service is expected or you should not be in this service related business. Going above and beyond with excellent service and over delivering and under promising are the things that will provide you with referrals. When you go to buy a car and the salesman says we have the highest ratings around for our service department do you really care or are you more focused on the bottom line price of the vehicle? Staying with this idea for a moment longer, think about what happened when Volkswagen came out with the new BUG or Acura came out with their new SUV. These cars where in such demand that when you went to the dealership the salesman came out with a clipboard and said “You can put your name on the waiting list with a $1000.00 non refundable deposit. Your car should be in within the next 3 months. Oh, by the way we cannot guarantee you the color”. Well people did give their deposits and waited for these cars. More importantly there was NO negotiation and people were actually buying these cars for over the list price. When you are a specialist with the ability to solve someone’s problem then the price issue disappears. Let me illustrate this a little further with an example from my recent past. My sister was having excruciating pain in her jaw and thought it might be a cavity that when un-detected. Her pain was so bad that she cried all the way to the dentist’s office. The dentist couldn’t find anything wrong with her and so he sent her to a neurologist due to some of the other symptoms she was having. Mind you, she didn’t have insurance at the time but she knew that the dentist was referring her to a specialist so she DIDN’T care how expensive he was, she just wanted this pain to go away. Imagine being in pain and shopping around for a specialist in the yellow pages…sound ridiculous? Long story short, this specialist pinpointed the problem and my sister is still paying the bill and VERY happy to do it. She didn’t shop the price, she took off work to meet him AND she traveled 90 minutes each way to see him! So start by picking your niche, becoming the expert, and letting everyone know about it. Stop trying to be the Jack-of-all-trades and become “the master of one”. You will soon start getting calls from applicants interested in having you solve their problems instead of rate shoppers who will only waste your time. Jessika Ondrick is a partner in LoanOfficerSuccess, Jessika Ondrick is known for the "wow" factor. As a successful businesswoman she is able to juggle a thriving and challenging business, four children that consist of two teenage girls and two rambunctious boys. As president of Security Funding Home Loans, she has built a thriving mortgage business in Idaho and other western states. Jessika is a top producing and nationally honored Mortgage Specialist. She also is a founding member and serves on the Board of Directors for the National Association of Responsible Loan Officers. |
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