Over the years, real estate professionals across the world have gained experienced in multitudes of areas for their real estate career – from negotiation tactics, marketing techniques, and all the way to learning about mortgage rates.
But to this day, many real estate agents do not understand the importance of learning about these concepts and how they can potentially change their entire career as an agent for the better.
Today’s focus will be on a fundamental part of real estate. It is the truth behind how mortgage rates can be your leverage in multiple different occasions including your prospecting stage to capture more leads!
Let’s begin with,
Mortgages in General
A mortgage is lent out to the lendee from a bank or other creditor after an approval. It is done in exchange for when the approved party is taking the title of a property. You will have monthly payments depending upon the terms, and rates which will be talked about later in today’s blog.
There are pre-qualifications and pre-approvals and the two have the slightest difference between them. A “pre-qualification” is a the measure of a person’s actual ability to get the loan. This is done by a loan officer asking you simple questions such as “How is your credit?”.
The mortgage “pre-approval” on the other hand shows that you’re ready and able to buy.
Your mortgage pre approval comes from:
- Credit score
- Credit history
Mortgages are a process, with step one being pre-qualifying for a mortgage. After that’s done, you will be able to move to the next step for your client which is getting a pre-approval.
So, what must a real estate agent always know?
“The Mortgage Rates”,
Yes, as a real estate agent, you must know all the mortgage rates at the top of their head.
I should be able to ask you at the oddest moment and your answer must come out right.
These rates constantly fluctuate due to multiple reasons but luckily for you, it will not be necessary to know why these rates change.
You are going to be working with diverse clientele and each of them will have their own preferences for mortgages, based on their income and personal choice – they choose terms, and rate types.
The word ‘term’ is used with mortgages for the amount of time you commit to a low mortgage rate, and lender’s terms and conditions.
There are 2 types of rates your client can choose:
1- Fixed Rates
- A set mortgage rate that has a fixed interest rate for the entire term of the loan
- Gives the clients a sense of comfort as they will always know the amount
2- Variable Rates
- The interest rate is not fixed
- They are attractive as they usually have a low initial interest rate for a few years
Mortgages and Prospecting
Now that you understand the How’s and Why’s of mortgages, we will jump into how they can be leveraged for when you are FINDING NEW CLIENTS during your prospecting stage.
With your mortgage knowledge and experience, you are able to understand the best types of mortgages certain buyers would like to take. By keeping up with all the rates, and packages, you are able to lead your client to the path of buying a home.
Let’s look at an example…
Say you are an agent and one of your past clients gives you a referral for one of their family members across the world. They got their visa and are now citizens of the country. They are in search for a home. You can start qualifying this lead by telling them at bank XYZ, they have a package for immigrants for a 25% down with no job verification with a lower fixed interest rate.
You now have given them a valuable piece of information by understanding their needs and they now will want to work with you.
Qualifying each of your leads is extremely important. With mortgages being one of the most stressful parts of buying and owning a home, motivating your clientele when good packages/interest rates are out can potentially get you sales.
Knowing the mortgage rates is part of your due diligence as an agent. There will be times where you might fall back and forget and you will notice it will negatively affect your business. To stay ahead of the game, knowing the mortgage rates will not be enough, the process of implementation is what gets you from Point A to B in the selling progress . Using the rates as valuable information will show your clientele that you are guiding them through the right information to keep them financially secure for their future.