It was July of 2020 and interest rates had just dropped below 3%, the entire Title & Escrow company was ignored! This season, many companies were on track to make more money than they had in years, or in some cases, ever! Buyers were financing in astronomical numbers!
Every title company wanted a large share of the current refi market and most would do anything to get it. The problem is; almost all of them are late to the party and unprepared.
Many national companies had established national refi rates with other major banks and lenders but that left many doing what they have always done; waiting until all the sound has hit fully and reacting. Unfortunately for many, while a few were prepared, most did not see the magnitude of this market in a mysterious way!
In August, nearly every remaining title company or agency, began a race to the bottom, and devoured the scraps that National had yet to acquire.
Over time, companies start promoting their new fast rates, good strategies and angry (negative profit) confirmation rates. A direct result of the poorly organized pre-market ruckus.
They will continue to compete only on price for about two years until mid-2022 when prices drive down the market.
Why is this happening? The moral of the story is simple, “any trader who is not well positioned in a market before that market explodes has only one thing left to try to paint a price picture; PRICE”.
Here is the good news; it doesn’t have to be like this. You can stand on the right foot and be ready to take the market-driven income from this next renaissance market.
Don’t get me wrong, even if you’re well positioned, you’ll have to deal with some aspects of competitive pricing, but once you’re positioned, you can choose which of those businesses you’re willing to take and what you’re willing to let go. take it.
Consider the simplest steps you can take right now. As I write this, rates are currently between 6.88% and 7.29%. So, there is time, not much, as rates are expected to drop closer to 6%.
Our safe guess is that anyone who positions well before rates fall below 6% will be the winners in the next financial meltdown in the market. However, remember that you cannot start this process when rates are at 6%, you have to start early as the setting process takes time.
If set correctly, the lower the rates fall below 6%, the more money your company will hold.
The principle of to put it is always there first. It’s when we’re not first, a race to the bottom happens.
As of the date of this article, approximately 68% of all purchase transactions currently have mortgages, while 32% of all closings are cash.
Here is what this means:
If you are a title agency/company that closes 100 sales files every month, you are currently dealing with 68 potential mortgage lenders every month. If you delete the foreigners (corporate banks) from the statistics it is estimated that you are always busy with at least 45 lending opportunities as mentioned in the example above.
How do you find those opportunities to position your title company better and more effectively with those lenders to allow you to capture the small amounts of money they currently have, while improving your position to “almost” automatically get all the increases in their refinance orders as rates drop to 6% or less? If you’re like most title companies…you just don’t exist!
Consider a simple consent-based sales process.
Since many lenders in the purchase files in the market in which we live, they only hear from title companies when something is needed, no balance or loan funds are needed, the lending world has learned to ignore the fear of the title company.
Since the true definition of separation is simply doing something different, it’s time to own the situation!
Try this:
- Call all local lenders when the foreclosure file opens to introduce yourself.
- Thank them for the “business”. This will be a call they have never had before! Of course, treat them like a real customer.
- After some small talk, ask if there is any additional information or details your team should know as you work through this current file.
- To close the call, use this script: “I wanted to thank you again for the opportunity to work with you on this file and work together to provide a smooth experience for the consumer. And before I let you go, what’s one or two refactoring files you’re working on right now that you could give me a chance to handle?”
Let’s look at the simple reasons this works so well.
- They have never been thanked for a purchase file before.
- Treat them like a real customer which removes their feeling of being out of file.
- Many lenders have some low-level maintenance work at the moment.
- As we are on the edge of the refi market, where they send their low level volume is very important to them which gives you the opportunity to be consistent and build a relationship.
- You are the only one who speaks to them with purpose.
- You have requested an order. They respect that.
This process will begin immediately in the pre-market to put You need to have a good working relationship with your local lenders who work in your market and guide you to see the potential refi growth as your alternative. well placed Borrowing clients see their activity increase at lower rates. And consider that these same lenders will likely see a rise in home equity loans as rates drop and buyers who have been keeping warm are now unable to qualify. Win! Win!
The choice is very easy and you are really in control.
Will you take this very easy to put step? Or play the traditional reactionary role and wait until prices drop, blood is in the water and all the noise creates a new race to the bottom?!
Darryl Turner is the CEO of The Darryl Turner Corporation.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the editor responsible for this piece: [email protected].
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