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Purchase-Centric Habits Are Key to Success in 2022


Did you write down New Year’s resolutions for 2022? If you’re like me, resolutions can be a bit of a mixed bag. It’s great to have the optimism and ambition to accomplish great things and make big changes, but it’s also easy to lose focus and let life get in the way.

I know I’m not alone. I read recently that 80 percent of New Year’s resolutions don’t make it past the second week of February. When I look at my own track record, there’s a clear delineation between the resolutions I keep and the ones that I abandon. Do you know what the difference is? The ones that succeed are almost always the ones that involve the forming of habits. As we charge into 2022, perhaps our resolution should be to quit making New Year’s resolutions and focus on habits instead. Our question this month: What new habits will bring you purchase success in 2022?

Purchase-Centric Habits

I spoke to a lender the other day who told me they were resolved to do more purchase business in the New Year. Yeah, you and everyone else. Another said they were determined to pick up market share. These are great aspirations, don’t get me wrong, but they’re not going to materialize just because you have a vision, any more than thinking about a gym membership will give you your ideal beach body.

The question lenders and originators should be asking themselves is not “How do I change my overall focus to purchase loans?” but rather “What daily changes do I need to make that will compound, pick up momentum, and propel us towards purchase market success?”

As most of us are aware by now, the refinance business that bolstered bottom lines and paychecks for the past two years is going away. Purchases, which went from 29 percent of loan closings in Q1 of 2020 to 53 percent in Q4, are expected to rise to 67 percent of the mix (2 in 3 loans) by the end of 2022. Add to this the fact that overall volume is expected to drop by a minimum of 30 percent. So, gone is the capacity strain of last year (with a huge pipeline in refinances), and the new challenge has become retooling and retraining originators to navigate these new purchase waters. In a purchase market, relationships rule and referrals make or break careers and companies. To survive and thrive, lenders and originators must shed the refinance muscle memory and establish new purchase-centric habits.

The Diagnosis

The question of the day: How do you make sure you don’t flare-and-then-fizzle with new habits? Answer: Start small. According to Google, establishing a habit takes an average of 66 days, but in the study behind that number, participants took anywhere from 18-254 days to get to a place where a new habit felt like second nature. The point is that everyone is different. You just have to start. Here are a few ideas to help you get started:

Habit #1: Start weekly check-ins. The biggest saboteurs to a delightful customer experience are poor communication and lack of communication. Establish a habit of weekly check-ins with both consumers and real estate agents, ideally on the same day for each of your in-process loans. Doing this proactively puts the customer’s mind at ease and provides a forum for any nagging concerns or questions they might have. While this was no doubt important in a refinance market, it’s even more important in a purchase market, where emotions and anxiety tend to run much higher. Before you say you’re too limited on time, bear in mind that for much of your pipeline, you may only need to shoot a quick email or text that says, “We’re on track.” You’ll reap benefits in spades for this small investment of your time. It’s a great one to start with for that reason.

Outcome: Borrower and real estate agent peace of mind, trust, loyalty.

Habit #2: Connect emotionally with your borrower(s). Purchase borrowers tend to be a little more tightly wound than refinance borrowers – and understandably so. Close to a third of them are going through the process for the first time and have no idea what to expect. For others, it was something of a miracle that their offer won out in a bidding war, so they’re extra wary of anything going wrong. For still others, they’re upgrading to their dream house or are in the midst of a move to a new job and new town or have a baby on the way. And the list goes on. Connecting emotionally with your borrowers can be as simple as saying, “How are you feeling about everything?” You’d be surprised as to the range of answers you’ll get to that question.

Outcome: Personal connection, loyalty, and advocacy.

Habit #3: Speak the real estate agent’s language. Real estate agents have two main concerns: getting paid (meaning getting the loan closed within the contract period) and serving as the main guardian of the borrower and their interests. What they like least is delays, surprises, or any documentation issues that put their timeline in jeopardy. So, just as it’s important to keep the borrower in the loop on a consistent basis, it’s equally important to establish a habit of updating real estate agents to give them peace of mind about the loan’s progress. The more visibility you can give them, the more trust you will establish with them. Also, probe to find out about other potential stressors that may be in play that put pressure on the timeline, like back-to-back closings or moving trucks scheduled to arrive, or tight daycare schedules that would make a late closing start disastrous. At the end of the day, knowing these things may not help you avoid loan delays, but it will help you empathize with the agent and understand the stakes from their perspective.

Outcome: Real estate agent’s peace of mind, trust, and loyalty.

The Prescription

The hard truth is that 2022 will come down to survival of the fittest, and the “fittest” will be the ones who have created smart and profitable habits. Here are some very specific habits that will up your purchase game and make sure you survive in 2022:

  1. Block out an hour every Friday for updates. Asking the borrower about their communication expectations early in the process has been a long-standing “good practice” by LOs, but the “best practice” is for the LO to choose and suggest a day themselves for recurring updates, so they can knock out all their weekly updates in one shot each week. Even at the height of the refinance boom, most LOs could have afforded one hour per week to ensure delighted borrowers. I’ve heard from several successful LOs that Friday morning is an ideal time for scheduling a habitual one-hour time block for updates, but pick whichever day works best for you.
  2. Ask borrowers how they’re feeling. Make the first question you ask every client every week in your update call, “How are you feeling?” Then let them talk and you just listen. Whether they give you one word “good” answer, or their life story, reassure them that they’re in good hands and that you’re going to continue to work hard for them.
  3. Video chat your referral partners. Borrowers are less likely to pick up a spontaneous FaceTime call, but real estate agents tend to be much more receptive since they’re more likely to be out and about in the world (as opposed to sitting in work-from-home “sweatpants” attire) and to a large degree, their success in their job depends on being reachable. It’s much easier to establish an emotional connection when you can read a person’s facial expressions and body language. According to a recent STRATMOR poll, only 25 percent of originators are using video conferencing technology in this way. Make it a habit and pass up three quarters of your competition!

How can you learn more about creating a better customer experience and about how the customer experience impacts your company?

Find out more about STRATMOR Group’s CX services and how transparency into the loan process can help your company. Contact Mike Seminari at mike.seminari@stratmorgroup.com.

To see how improving your NPS score translates into real revenue dollars, give Mike a call.

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