So you receive a phone call from a client you have already pre-approved for a loan. They tell you that the real estate agent insists that they call to find out what your interest rate is because their in-house mortgage company will beat the interest rate that you quote.
How do you respond? I posted this question on my Facebook page and here are some of the responses that you can use if (and when) this ever happens to you.
If you practice and use some of these scripts, I can assure you that clients will still do business with you — even if your rates are a little higher than your competitors'.
- I would ask the client to find out what interest rate the in-house mortgage company is quoting them. I would tell the client that if they do ask you to call them back with info about what other mortgage companies are quoting (and that they will beat the rate), they should ask them why they did not give you their best interest rate right off the bat.
- I think that establishing a rapport eliminates the question.
- I would call the real estate agent and ask them why they are insisting that the client shop for interest rates, and whether they want to screw up a deal where the client has already been pre-approved for the loan.
- I would say, "Rates are very important; however, the lowest rate in the wrong loan will cost you thousands of dollars. It's important to me that not only do we give you a low rate, but low closing costs and a timely closing. May I give you a suggestion? Rather than call around for rates, make your calls to determine the integrity of the loan officer, if they have the knowledge and experience to overcome the hurdles that every loan has, and will they be there to help you through the closing without any additional expenses. I would also like to be your loan officer but I want to be certain that a timely closing is just as important to you as the interest rate. Can we still do business together?"
- Why won't the in-house mortgage company quote you the rate now? No matter what the rate, there will always be someone lower. However, it's usually not about the rate, it's about the type of loan, the ability to meet your deadline and who will be there even after the loan closes.
- I tell them that it may cost them more if they go with another mortgage company, that it's not always about the rate. But I also state that my "integrity" is not for sale, and I would rather lose them as a customer than have a surprise waiting from them at the closing table. I just don’t do business that way.
- Interest rate differences are usually quoted in eighths of a percentage point, and I tell them that if the rates are a lot lower that everyone else, it's because they are cutting costs somewhere and the service they receive for $8 per month savings will not be worth it in the long run.
- I would give them the name of my competitor, tell them that they have good rates, but they never close the loan on time (then I shut up).
- I would tell them that I should probably stop working on their file immediately so I can give my time and attention to other clients who value my service. The lowest interest rate is not the best strategy.
- Even though the clients may have found a lower interest rate, stats have shown that that most buyers don't want to go through the approval process over again. I ask them if they would share the interest rate and closing costs that others have been quoting them, and since I've gone through the pre-approval process and held their hand so far, I have earned the opportunity to be the last one to give them an interest rate and closing costs quote.
- I had a client who told me that they found an interest rate that was much lower than the one I quoted (the rate simply didn't exist), so I offered to send their loan file to that lender. It turned out that the borrower was simply trying to get me to lower my interest rates.
What do you say? What would you add to the scripts listed above?
Karen Deis is the publisher of www.MortgageCurrentcy.com. She is also is president of LoanOfficerTraining.com. She can be contracted at Karen@loanofficermagazine.com or post on www.Facebook.com/KarenDeis.