The coronavirus has changed the loan officer-real estate agent link
After the real estate market came to a virtual standstill in April, real estate seems to have rebounded with fury. The best agents have quickly learned how to adapt to social distancing guidelines, while buyers are more eager than ever to find their dream home.
But is it really possible that this “new normal” could produce the best year ever for mortgage professionals?
While it may appear that bidding wars resulting from a reduced supply and growing demand from buyers, would be good for real estate professionals, mortgage originators are surprisingly the big winners here. You don’t have to take my word for it, though.
Take a look at the evidence for yourself:
Low interest rates push buyers straight to lenders
When it comes to first-time buyers, the instinct may be to find a real estate agent first and then start looking for properties. However, budget-conscious buyers know that it actually makes more sense to meet with a lender to determine how much home you can afford.
Plus, current owners are asking, “What if I could trade in for something newer, bigger, better?” They are more serious about finding a new home and many are starting this search online. Because the prices are low, buyers know they won’t get a better price in two years. In many cases, serious buyers call their trusted lender first.
In addition, with interest rates constantly in the news, buyers are more likely than ever to consider contacting a lender directly for a low rate. Borrowers also realize how important it is to get the opinions of mortgage experts. They know mortgage professionals will give them the information they need to make the best decisions for their family.
Lenders thrive on refinancing
With interest rates at historically low levels and many seeking to dip into equity, there is a stampede of homeowners eager to refinance. As a result, lenders reap the immediate financial gains from the cost of application and closing costs. However, only lenders who can handle the volume will see true positive winds.
Based on what happened when the Fed cut interest rates early MarchIt is clear that consumers are watching mortgage rates closely. Lenders who can handle the surge in demand and participate in the process through other means (such as marketing services for other lenders), stand to gain everything here.
The home buying process has been reversed
Since most of the home buying process can now be done online, the arguments for buying a home without the help of a real estate agent are growing – and the pandemic has only accelerated this trend. Many today tech savvy buyers feel confident enough to find all the information they need to make a buying decision. However, the vast majority of current and future buyers will still need a lender to finance their dreams.
Now who has the power?
For these and other reasons, smart lenders realize this may be the best time to start generating their own leads. For professionals who know how to pivot and get on the path to opportunity, there is no limit to their success.
For too long, loan officers have been beholden to real estate professionals for their leads. Those days are over. More and more homeowners and those looking to buy are turning to lenders directly.
It’s a new dawn for mortgage lenders. Will you make 2020 your best year?