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How should LOs prepare for the market ahead?

Make a plan, stick to it and stay positive

The latest numbers have many in the industry starting the year on a hopeful note, with the possibility that we’ll see mortgage rates returning to the 5% range in 2023.

“The 5% market’s a healthy market,” said Anna Ruotolo, branch manager and senior loan officer at Synergy One Lending. “A 5% market will be good. I think that brings enough people back into the market, [though] I do think there’s still a lot more demand than supply.”

These hopes for a declining rate have many loan officers feeling optimistic about 2023’s business prospects after experiencing lower volumes last year. But as we enter the first quarter of the year, LOs need to balance their hopes with on-the-ground action to prepare for whatever does lie ahead.

“I think these next couple of months are crucial for anybody in the mortgage and real estate industry to position themselves strongly,” said Susan Byerley, senior loan officer at Neighborhood Loans. “They’re projecting the interest rates are going to have a bit of a downtick in early spring, and that’s going to get some buyers off the bench.”

So what should LOs do in Q1 to set themselves up for success in the year ahead? 

Make a plan

For Jason Stallworth, retail sales manager at Planet Home Lending, preparation for Q1 began last month by meeting with new prospects, real estate agents and brokers. He sat down with potential buyers and his referral partners to set goals and expectations for 2023 and make a plan to help them meet their goals.

“Most importantly, the biggest part of it is implementing the plan that you put into place,” Stallworth said. “It means nothing if you don’t implement it. Consistency is key to getting there. You do the work, the money and the results will follow.” 

Ruotolo reviews business plans with her loan officers and makes sure that in addition to setting a goal, they set up the steps they need to take to achieve it.

“I’m not so much focused on the number, I know what my number is,” she said. “I’m focused on the steps and the activities I have to do to get to that number.”

Stay in touch with your sphere of influence

A critical part of achieving those goals is staying in touch with your sphere of influence and referral partners. Networking with your book of business and creating new relationships helps you maintain your business and continue to grow.

For example, Ruotolo is keeping in touch with her database and the real estate agents that refer and support her. But she’s also creating a target list of clients she’d like to be working with and reaching out to them.

“We have to operate with extreme intention of creating as many relationships as possible, making as many contacts as possible during Q1,” Ruotolo said. “This is the time that we could gain market share by really creating some strong relationships during this time.” 

Continue to educate

Part of maintaining those critical relationships is education, whether that’s for your real estate agent partners or prospective buyers.

A record number of real estate agents have joined the industry in the past few years, and the newer ones won’t have experienced a changing market. They’ll need to learn about programs like the 3-2-1 or 2-1 buydown and how they work, and may need help promoting their listings. 

Both Byerley and Ruotolo said they do webinars and videos to help educate borrowers. Byerley noted the importance of being “pleasantly persistent” with borrower education in light of misconceptions and negative mindsets.

“I bring in a financial adviser, anybody that can speak to where our market is right now in educating people that now is really the perfect time to buy, because we don’t know what things are going to look like down the road,” Byerley said. “We’re in uncharted waters right now, so we have to get as creative as we possibly can.”

Homebuyers are making the largest financial transaction of their lives. It’s important not only to position yourself as a knowledgeable professional they can rely on, but to make sure you’re giving them the most accurate information possible to level-set the right way.

“A lot of buyers think that the market’s going to go back to COVID numbers; they think the rate’s going to go back down to 2-3%. And it’s unfortunate that it’s not, so we have to really set realistic expectations for the buyers,” Stallworth said. “It’s our job as professionals to do that, and if we can do that, it makes our jobs easier by just managing that buyer’s expectations.”

Don’t slow down

While purchase volumes are down, it may be tempting to slow down and wait for rates and business to improve after Q1. But now is the time to work harder than ever. 

“I’m not seeing the effects of the market slowing down,” Stallworth said. “Why? Because I’m not letting the market slowing down affect my work. I’m still putting in the work — if anything, it’s making me work harder.”

Whatever your plan is, stick to it and stay focused. The work will pay off, Byerley said. 

“I look at this as seed-planting time. Give it about four or six months, we’re going to be harvesting the fruits of our labor,” she said. “Work as if you’re completely swamped, don’t have the mentality of, ‘Oh, I’m super slow.’ When people ask me how I’m doing, I’m swamped. I may not be swamped closing loans, but I’m busy. That’s a mindset.”

Stay positive

Regardless of how the market moves, it’s important to stay positive during this time and avoid bringing a negative tone into conversations, Ruotolo said. 

“Stay truth-based but optimistic,” she said. “Because it is a good opportunity to buy a home, if you can afford a home. You can negotiate now better than you could in the past, and if rates go down, then we refinance you.”

If you’re not feeling positive on a particular day, she suggested stepping away until you can be positive and avoid doom-and-gloom conversations. Focus on your belief in real estate and what it can do for the buyers you work with.

“Stay positive,” she said. “Stay focused on knowing that it is a great service that we provide and it’s a wonderful goal to help people achieve.”

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