Yesterday consisted of many phone calls with clients about an abundance of things. One call and client stood out from the rest though. That particular client is on the fence in wanting to lock their rate. While they are well aware that rates can change daily and even hourly, they have their fingers crossed that rates will nudge down just a tad so the rate they receive can be the talking points at many a dinner party and business functions.
As we were talking about rates, the market, our dissertations on world peace, who is going to win the Steeler/Eagle game this Sunday, and the like... the conversation took a turn. Please note that this gentlemen was a shopper; he had said he had talked to over 15 companies in two weeks before deciding on me. Here's where the conversation turned a bit interesting, and I'm paraphrasing:
Me - So, I gotta ask... what made you choose me over everyone else? Truth be told, we all have similar if not the same in products. Especially for your situation (money down, excellent credit, can document his income, etc.)
Client - Oh, that's easy. You had the best rate.
Me - Really, that's the only reason?
Client - Well, you answered all my emails and returned all my calls very fast.
Me - So, service came into play?
Client - Oh yeah, absolutely.
Me - What if you had to choose between service and cost (rates, fees, etc)?
Client - I'd choose both.
Me- Of course you would, we all would. But what if it was one or the other, not both?
Client - (Paused for a bit) I guess I'd feel more comfortable knowing that I was going to have service, someone to speak with and who would be there every step of the way and after if necessary.
Me - Novel idea, eh? That's so overlooked and misunderstood by consumers about the Real Estate Business. There's this fixation on cost and few realize the importance of service.
Client - How about you, do you shop that way?
Me - Very fair question. Tell you what, I'll give you two examples. As a Mortgage Broker, I deal with a variety of Wholesale Lenders and Banks. Historically and even presently, the ones I use for the majority of transactions I close don't have the best rates. Actually, they may be an 1/8th or a 1/4 higher in rate at times.
Client - Really, why wouldn't you use the ones with the lower rates to get us better deals?
Me - Oh, I've used them in the past. The service with them was pretty bad. I wouldn't get return phone calls or emails for days and that concerned me. When I quote and lock a rate, I do so for a certain amount of time. If the service is lacking, that may delay closing. It can jeopardize any rate I quote or lock, increasing the likelihood of the deal falling through. It's one thing to quote the best rate, quite another to close at it.
Client - That makes sense, I'm still VERY rate sensitive though. I'm sure you can understand that.
Me - Oh crap, rates just went up 2%!
Client - Oh NO!
Me - I'm kidding.
Client - You almost gave me a heart attack!
Me - I just wanted to loosen things up a bit. The other example I want to give you is an example I have used before. It is my homeowners insurance agent. I shopped around before buying my home and he was probably the 4th cheapest out of the five companies I shopped around with.
Client - Wow, that seems like a financial mistake to me. You are spending more money that you have too, Jason.
Me - And I'm also getting what I pay for. My insurance guy is there whenever I need them, I'll shoot him an email and he will call me right away. He was referred to me by one of my best friends. There's a trust factor there, as well as a service factor. I was and am willing to pay for that... it's more than worth the price for me.
Client - I understand what you are saying. So, does that mean I have to pay you more. I'm also VERY fee sensitive as you well know.
Me - Nope, I'm charging the same as I said at the beginning. The point I'm trying to make is that for your future mortgage needs (while I hope you would come directly to me) if you do shop again, service is something you should take into consideration just as much. In my experience, service and trust tend to go hand in hand. Those two factors will also help ensure you get a good deal and the straight scoop every time.
Client - So, I guess I'm getting off cheap considering ...
Me - Yeah, you are getting a killer deal. But, it's worth it for me to earn your business and your trust.
Client - I appreciate this, I really do. And your patience through this has been pretty impressive.
Me - It is a virtue and you are very welcome. Thanks for saying that. Oh wow, rates went down 2%!
Client - Shut up
Congratulations on getting through to this client. It sounds like you take care of your clients well.
Sometimes we have the same problem with sellers who go with the Realtor with the highest price as opposed to the best Realtor.
All the best!
Jason,
It's hard to convince a consumer that it's impossible to 'shop rate' alone!!! Thanks, Fran
Oh crap, rates just went up 2%! Cracking up over that one. IMO the rate qouted doesn't matter if the loan won't close! Service has value.
Jason - good conversation - good service sells itself, but some folks don't appreciate it or realize the costs of lack of service and bad communication - so when he told you to shut up, did you?
LOL @ Virginia! I don't think that's even possible :)
If we all had the candor to speak to our clients about the value of our service, and the humor to get through to them - then this wouldn't be such an issue. I really don't think most people place value on service anymore. They just want it quick and cheap. It's making it harder for those of us who genuinely like to 'work' for our $$ to make it in this business anymore.
Cute post!
Jason - this is one of the best posts I've read in a long time. You did a great job of showcasing the truth about service vs. cost.
The entire world is in "budget mode" and that makes some people make foolish decisions. They will save $200 but it will cost them $2,000 in aggravation, uncertainty, and frustration.
Penny wise and pound foolish.
Kevin - Over the years, I've learned to shop not only according to price... but with service, trust, and education in mind. That's being savvy in my book.
Fran - It's extremely hard. Frankly, between advertisements and low rates for so long, it's become somewhat of a canned way to look at quotes and lenders.
Sandra - It does have value and it isn't just another catch-phrase.
Virginia - Well, not entirely. He did get a chuckle out of me though:-)
Jennifer- Thank you hun. "I really don't think most people place value on service anymore." Sadly, that probably holds a lot of truth.
Carol - Wow, I really appreciate that. Your last sentence is true wisdom for the ages.
Jason, What have you done for me lately? That's another one of those obstacles that often trips people up. I hope your client's memory is longer than some others I know. ;o) Keep up the good work!
How many times have we told our clients, (and kids) you get what you pay for? Service, and trust are very important, more so than that 1/8 point difference. I thought my client shopping a loan to 6 lenders was bad! She also waited too long, and lost a good rate!
Too bad you weren't on the phone with him this morning, the up and down remarks would have been close to true. Great conversation here Jason.
Greg- Yeah, I think we all deal with that. That's why it is vital to keep in front folks as much as possible, without incurring a PFA or anything:-)
Carol - Yup, you got it. I'll beat this horse until the Government bails out our small firm over here in Allentown;-)
Fred - True that. While I was joking, there is a scary underlying truth in those jumps and falls.
Straight out of the book of High Trust Sales!
Jason, you are too much, but a typical client on a typical day.
Eleanor - Sounds like a good read, perhaps I should get my hands on a few of some of those books. I'm long overdue in wrapping my brain around such guidance and advice in the world of sales.
Nancy - I'm too much? Well, I am what I am:-)
So, is he off the fence now? I hope so.
This is a really great post. I liked the way you presented it through the coverstation between the broker and his client. Did you remind him that when he does decide to lock in his rate that he can't come back and get a price adjustment if rates go down because shopping for a mortgage is not like shopping at Walmart?
Michelle
So, this really happened? I would think he would have been "too busy" to chat like this. Anyway, great points. In CA I recommended lenders based upon my 14 years of relationships and knowing who would perform and provide the best service plus competitive rates. I don't have any favorites here yet!
So what I just read is that rates shot up 4% yesterday? That would have us hovering around 10-11%? We're doomed! Doomed I say! Pass the duct tape and staple your organ donor card to your forehead, it's shenanigans!
I love it -you crack me up -
Jason - another great post. Keep up the good work!
one of the biggest problems facing realtors are clients trying to save costs by negotiating fees instead of quality agents and more agents willing to discount to get something versus nothing
Michelle - He's off the fence to my knowledge, but we aren't having a bonfire in my backyard just yet. I'm not even sure what that last sentence (of mine means... Western, Pa philosophy?). As far as the reminders of once you are locked in, you are locked in; I've addressed that more in the past few months than I'd care to think about. The 'float down' is getting 'locked up.' I think...
Diane - Yup. I had two conversations that day with clients that lasted at least an hour. Normally, the conversation is pithy. In these cases, not so much. This gentlemen had already decided to attain my services after all this time, I was just probing into why.
Slaybaugh- According to my Driver's License, I'm an organ donor. I keep trying to ensure that the fine print spells out which organs will be good to go when I'm doning/donoring. Is that a word? Either of them?
Thesa - Every once in a full moon, I do the same;-)
Thank you, Todd.
James - While I'm not an agent, negotiation is a part of our business. I'll go one step further and say write while the negotiation can be to skirt down profits to do a certain volume of business (or individual transaction), it can also be utilized to booster up the commission depending upon the particular case and transaction. Negotiations can be beneficial in many ways, yet we'll find that it doesn't mean it always comes out cheaper.
I totally enjoy your somewhat twisted sense of humor! I am also fortunate that I develop a relationship with many of my clients that allows me to periodically "jack" with them in a humorous manner and sometimes it is especially helpful when a situation is in need of diffusing! Rock on!
I just noticed that you replied to the last posts at 2:30 am...Man, don't you never sleep?
Jason - it's great that you can make your clients laugh. You sound just like my son, Rob, with his clients. Excellent point, though - what good is a lower rate if they can't close, or if they can't close before the lock expires and then the rate goes up.
Great post ! Those are the best clients - the ones that appreciate the service. In reality, we stress the importance of service to our clients regarding mortgage professionals. The ones that quote the best rates we are always nervous of for the exact same reaons... too good to be true ? will it close on time ? bait and switch ? etc ??? : )
Russell- Yes I do sleep, occasionally. I've never been one to sleep all that much though. You are familiar with Tyler Durden, aren't you:-)
Sharon- Exactly! I suppose that it helps me lose some business on the front end, but it certainly avoids headaches and broken promises on the back end.
Christopher and Stephanie- Agreed. Price is important, there is no doubt about that. Yet, I find that service will win over trust and repeated business much more so. And shopping service tends to be cheaper and less stressful in the long run.
You have a great personality and that comes across with a smile in your blogs...great blog...you can count on me to send some leads your way.
Jason.... wait, you said he is getting a killer deal? Sounds like a sales person....
Overall, I basically tell people to move on if they want the lowest rate. I'll give it to them, but I might return a phone call 2 days later. That might sound unprofessional, but I am not an app taker. This was done nicely. Don't you just love loan officers that sell rate?