August 7th, 2019
Pay attention to this one. A recent Fannie Mae survey found something that will be important for any loan officers who originate purchase loans: the majority of home buyers choose their lender before they have a signed contract. By the numbers, 70% of respondents who obtained multiple mortgage quotes chose their lender before having a contract, and that number bumped up to 75% among first-time buyers.
Now we all know that buying a home in the current housing environment can be tricky, and competition has remained high among potential buyers, especially when you have mortgage consumers competing with cash offers. In June, the average time for houses on the market to go from listing to contract was 35 days. So what do those mortgage borrowers do to become more attractive to sellers? Well, according to Doug Duncan, chief economist at Fannie Mae, “The presence of cash offers has made it more pressing for people to have their mortgage in-hand when they make their offer to be able to compete with cash offers.”
We’ve said it many times before: in order to compete with other lenders, and in order to help your borrowers compete with other buyers, you have to be extremely proactive in doing full pre-approval applications. No, not pre-qualifications, pre-approvals, complete with initial document review and customized offers. By doing a simple pre-qual and rate quote, you disempower your customers because you don’t give them any leverage or differentiating factors. You should give them a letter that helps them compete by showing their file has been reviewed and approved by a lender and they are READY to be under contract. It’s the only way to become the borrower’s chosen lender and to excel in today’s purchase environment.
Image by Fannie Mae