The concept of the ‘new economic order’ consumer vs. the ‘traditional’ consumer is worth some thought. In particular today.
10 min well spent; http://vimeo.com/68180098
Now think about this concept in the context of the falling-rate environment in which we find ourselves. A very challenging environment in many ways.
i.e. Clients whose files we worked so hard on weeks ago (a distant memory) to get things nailed down for subject removal (COF), yet with closing dates in May, June, or even July many of our clients now have wandering eyes. Only fair considering all the activity there is.
The Brokers challenge; If all that was delivered was a winning rate, and nothing else but rate, you now have problem.
If however time was invested in educating the client on prepayment policies, IRD penalty potential, the benefits of a 30yr AM when looking to purchase additional properties, etc. If this and more was done, it then becomes a much simpler task to highlight the weaknesses in many of the 2.99% (and lower) offerings.
Communication is vital in the coming days and weeks in order to maintain clients focus on the value of the benefits of the plan put in place from the start.
Said plan had best be a multi-faceted one. Including broad yet basic education on how much more a Mortgage Broker provides a client than just a .05% lower rate.
Although you may well be able to deliver that rate as well, and that better be happening too.
After all rate is far from the most important consideration, yet it is the most important consideration. This is the conundrum in which we reside.
Make it about everything but rate, then deliver a winning rate within the framework of priorities you have built with the client.
Make it all about the client!
Stop reading this and start communicating with your clients. Make sure the ones that chose variable still value the benefits as the gap between variable and longer term fixed narrows. Perhaps have conversations about the merits of shorter term fixed rates. Speak about pre-payment policies.
Most of all, make sure that the product in which your client chose to be placed, a decision largely based on your advice, does indeed still make sense for them.
Communication is key!