How Mortgage Brokers Can Win in a Changing Market

Posted May 3, 2021
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A changing market environment in the mortgage industry is a good time to reflect on the success that the wholesale channel achieved throughout 2020 despite the immense obstacles posed due to the digital disruption and economic volatility caused by the COVID-19 pandemic. That is why it is so important for brokers to determine their goals and figure out the strategies and tactics that they will use in order to grow their business to win in a changing market landscape.

The housing industry is continuing to thrive but high demand and low inventory levels means the competition is fierce for every loan and that is where the brokers dynamic flexibility comes into play. The broker channel is in a strong position to win the future and continue growing market share due to the relationship-based client services, breadth of loan options, and technology resources they provide leading to a superior experience.

Housing Market Predictions for 2021

We have now entered purchase season and the trends that existed throughout much of 2020 remain in place to keep the housing market extremely competitive. Because of the highly fluid nature of the current market, making predictions for the remainder of 2021 could prove difficult for those who don’t follow trends in industry on a daily basis. That’s why AIME was lucky enough to speak with an industry expert and community advocate Barry Habib whose understanding of the market is unchallenged and who gives brokers insights on how to successfully navigate today’s landscape.

Barry Habib, CEO of MBS Highway, expects the market to continue to see limited housing supply and low, but gradually rising, mortgage rates driving up property prices and competition as more first time buyers compete for the historically small number of available homes. Habib also expects the market to remain tight throughout this spring with real estate agents across the country having reported multiple offers on nearly every listing for months.

After reaching historic lows early this year, mortgage rates have been on an upward trajectory for the last few months and Habib sees this trend likely remaining in place. It is important to note that although rates are climbing, they will still be extremely low, so the higher rates aren’t expected to have a huge impact on mortgage affordability for the time being.

The rapidly changing market with low inventory means sellers are in luck because they’ll be able to command top dollar for their properties, and buyers will need to be especially intelligent about who they work with to close the deal. Thankfully for the wholesale channel, this provides a chance for the expertise of local community leaders in the housing market like mortgage brokers to truly shine. By leaning on the technological, relationship-based and online-centric skill sets that the broker channel displays every day, consumers will find a true ally in achieving their home buying dreams.

3 Tips to Help Mortgage Brokers Win Big in 2021

Success as a mortgage broker is a challenge but one that is worth pursuing. You must be capable of addressing client concerns at all times and always be ready to put the consumer first, yet you must also push the limits because the competition is intense. You need to establish solid processes and procedures but you should also keep learning and innovating. In other words, your success as a broker will undoubtedly be a mixture of several different attributes. These include your utilization of technology, your relationships with the industry and your clients, as well as your willingness to learn and improve. Here are three of the most important factors that determine your success as a mortgage broker.

1. Leverage Technology

The manner in which mortgage industry professionals do business is becoming an increasingly digital experience. Technology is likely to continue being the biggest disruptive force facing brokers long after the current market environment begins to shift. Leveraging and integrating technology will allow wholesale shops to close loans more efficiently and provide for a seamless transition throughout the loan process that will save a lot of wasted time for consumers and brokers alike.

Thanks to a number of technological improvements from service providers in the mortgage industry, many of which can be found in AIME’s Brokers Are Better vendor network, brokers can move effortlessly from the application stage to a clear to close status all without picking up a pen. This has revolutionized the loan process and leveled the playing field for the wholesale channel as rates show signs of gradual upward movement going forward.

The capability of brokers to provide a fully integrated mortgage experience speaks to the value the our channel provides to real estate agents and borrowers as inventory likely remains low throughout the summer. Brokers are without a doubt keenly aware of the various ways in which a mortgage transaction is processed across the industry with many different approaches, but having access to tools that will make the job easier is a unique selling point for the broker channel model.

Technology and how it is utilized is clearly an integral aspect of running a successful broker shop. New tools are only as good as the people who are using them, however, and it is vital that wholesale professionals lean in on using these tools to create value for their clients and emphasize that, because without value, technology is simply data on a screen.

“When you create value, when you give people a reason to trust what you’re saying and they understand why you’re saying thanks to clear communication and useful technology, they’re more likely to continue to be engaged with you over the long term. We don’t want to look at customers as individual transactions. They should be relationships. They should be a customer for life mentality.” – Barry Habib, CEO of MBS Highway

2. Build Relationships Long Term Relationships

During a typical purchase season, building a stable roster of real estate agent relationships is key for any independent mortgage brokers business pipeline. An enduring aspect of both the job responsibilities of mortgage brokers and real estate agents is that their primary interests have to do with the financial well being of their clients and not to any particular lender. This freedom more often than not leads to unmatched business opportunities even the most corporate of retail channel rivals cannot match.

Brokers can build their community of real estate partners by providing them an efficient experience thanks to our unparalleled expertise regarding the local community and innovative tools that will provide for faster turn times than the retail channel. This means brokers can offer real estate agents the opportunity to take the stress out of the process and impactfully build their brand as well.

A mortgage broker’s ability to shop around across various lenders and the high level service they provide will surely pay dividends for both parties in the long run. It’s important to remember however that for the local and independent mortgage brokers their brand reputation is on the line and at all times and continuously raising to the occasion is expected at always.

3. Proactively Reach Your Audience

Mortgage brokers should be constantly thinking about new and compelling ways to set themselves apart from the competition. Inflation and rising interest rates mean that market demands could shift at a moment’s notice. There is always the potential for business to slow down due to higher interest rates and refinance opportunities to pick back up. That is why brokers need to have a proactive approach to social media and reach their audience where they are in order to determine the business needs of the local community.

While having an active social media presence can be time consuming it can give you an edge when engaging in conversations online is a large part of the modern marketing strategy. The Millennial generation, today’s largest demographic of homebuyers, is increasingly online when it comes to the homebuying process and posting informative and interactive content online is a great way to reach that cohort of prospective homeowners.

Creating a meaningful online presence on social media also will likely mean paying attention to how your business is reviewed online as well. Resources like Oggvo are helpful when it comes to establishing review funnels that will automate asking, guiding, and reminding your clients to leave online reviews. This will allow broker shop’s to optimize their online presence and maintain a reputation that speaks highly of the service they provide.

Tip: Watch our How to Use Instagram Stories webinar

Growing Your Business

The wholesale channel has come a long way over the course of the past few years and there is no doubt that our community continues to march toward a 25% market share. As evidenced by AIME’s recent announcement of its Ignite mortgage career training program and Spark small business grant, more retail professionals are learning our community is the best place to work because it’s the best place for borrowers to get a loan. The opportunity to grow your business is only just getting started and if brokers are able to plan accordingly and leverage the tools at their disposal for success the groundwork will be in place for many years to come.

Watch Barry Habib’s 2021 Market Update Video

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