Why a "SHIFT" Can Be Scary!
So many stories, so much data, so much information; how do you dig through it all and know how it impacts you and your market? Well, some things are national in scope, like interest rates, some loan guidelines, some products and programs, and a large number of regulations. The key part remains, what does national news mean to you? In some cases it can really impact your business, while in others it may have no bearing at all. You have to know what to look for and how each of these things impacts your specific market.
More likely than not, national numbers have far less direct pressure on your local markets than you think. In a large part of the country, FNMA loan limits rising have zero to do with the market because most home sales are far below that limit. The change in a state or local bond program could be much more of local interest to these buyers. The results need to be weighed out against your specific location. Knowing the specific local numbers can really help your business, especially when your market runs contrary to the national average or isn’t connected to the information at all.
A good example is a tale of two originators. One in Georgia spent a great deal of time keeping deals together in January that were scheduled to close but couldn’t because they were USDA loans and the government shutdown put a halt on that process. While another in Arizona kept closing loans as if nothing was wrong at all. To some markets the shutdown really hurt business, while in others they really didn’t notice a thing.
The important piece here is to understand that your clients and referral partners often don’t see anything but national numbers. They see information on the internet and a story that is bias toward a specific group or opinion while the local reality is far different. I see this frequently when speaking to groups of real estate and mortgage professionals who believe that the housing market is shifting toward a collapse. That home prices are falling. That we are heading toward another housing bubble. The actual facts don’t support that interpretation. The reality is right now that mortgage purchase applications are UP more than 3% year over year. Housing going into contract in January actually increased and that interest rates are LOWER than they were six months ago and property appreciation is still projected to GROW by 4% or more this year!
There are also more listings on the market, homes in default are declining, and foreclosures are still going down. Yes, these are also national numbers, but you can look locally at your own MSA and see how you compare.
For those professionals who are worried about the shift to online lenders and discount brokers, that shift only applies to those who can’t make a case for the VALUE they provide and the quality of the client experience. If you can’t justify your own value, then you have a problem. If you provide a quality client experience, exceptional value, and do it at a fair price, you could actually see your market share GROW as those cut rate providers go broke, get out of the market, or people discover that the “best rate” online came from the best “LIAR” on the internet!
Yes, the industry is changing and there certainly is a “SHIFT” in how and where people get their information. You as a professional are obligated to know the numbers and provide the information on how these things relate to your market. Are more people looking at our business as a transactional based business, yes they are, but it has become that way because professionals in the mortgage and real estate community have forgotten about the quality of the customer experience and the real value that local professionals can bring to the table.
As I have always stated, “The rate isn’t great if the closing is late” and “it’s not a great deal if the deal doesn’t close!”
Understand the fear, address the concerns, provide the local and specific information, and provide value and a great customer experience and you will find that there are always going to people who value an expert and want a professional relationship than want the best rate on the wrong product or a loan that doesn’t close!
Questions or comments: [email protected]
