Real estate professionals throughout the country have no shortage of homebuyers, but they do have an extreme shortage of available inventory for their buyers to purchase. Mortgage professionals are dealing with the same challenges as they, too, have no lack of borrowers who are pre-approved for mortgage financing but can find properties to purchase, or they are getting caught up in multiple bid situations.
Reality is that the housing market has once again tightened, and the limited number of sellers is creating a chokehold on real estate purchase transactions. The lack of new and existing homes for sale is having an impact on both lower-end and higher-end price points.
The number of mortgage professionals asking me the same question over and over regarding the limited inventory keeps growing and growing. It seems clear that the majority of loan officers in the marketplace have not really moved away from depending upon refinances, nor have they clearly given thought as to how to overcome the challenges that a limited inventory market creates.
The solution for a loan officer to increase their purchase business when inventory is tight comes down to simple math. I do not make light of what I’m about to say, but in this case, the most straightforward answer is the one that is staring most loan officers in the face, but they refused to want to accept the truth about it.
The simple math that I am referencing is that if your current referral partner network is not providing you enough buyers who are going into escrow, then you must increase the number of your referral partners. There is no other solution to this if you are looking to build your purchase business.
Unfortunately, most originators are either rusty at developing agent relationships, or they simply have no idea on how to do it. Developing great agent relationships is not as hard as most loan officers think. It does, however, take dedication and commitment to consistently working towards the gradual development of these relationships, which grows over time.
Where most loan officers struggle, is that when they decide to go after purchase business and develop agent relationships, they are usually in a place of desperation. Rather than having been committed to this business development plan on an ongoing basis, many loan officers play the game of going after the low hanging fruit of refinances, until that tree no longer is bearing fruit.
A movement in interest rates of as little as 1/4% can instantly change the volume of loans in the refi market. Although most originators know this, they choose to ignore it until they are faced with it.
Click the banner below to learn more about agent relationship development!