How to Create Excitement in the Face of High Interest RatesMar 08, 2023
A Psychological Approach to Rising Numbers
Interest rates have been rising but you may be compounding the issue by taking a lackadaisical approach. Ask yourself if the following sounds familiar.
The Who, The What, and The Why
You start talking to a prospective buyer and for the sake of this scenario, we’ll say the rates are at five and a quarter and they don’t pull the trigger. Maybe they made a couple offers that didn’t get accepted and now the rates start to climb. It’s at this point the client puts things on hold. He or she feels they can’t afford to buy anymore and decides to keep renting for the time being.
What do you do now? Most loan originators do nothing. The interest rates continue to climb, and they still do nothing. Why would you, right? They balked at five and a quarter, so why would you call to tell them rates are at seven?
Here’s why. You need to reset their psychological definition of a good interest rate.
Create a little pain for your clients. Let all your pre-approved buyers and leads know every time the rate goes up another percent or so. Remember, the old definition of a good rate was something below five and a quarter. As the rate climbs, the conversation they’ll have with either themselves or their spouse is along the lines of “We shouldn’t have waited.”
Let’s say the rate that started at a five and a quarter has now climbed to seven and a quarter and it sits there for a while. Eventually, that rate will drop. It goes to six, or five and three quarters. That rate now sounds attractive. Why? Because your measured communication the client reset the definition of a good interest rate.
The Next Step
Tim Braheem is the Head Coach at Performance Experts and the Host of the 360 Experience Podcast. Tim used this technique as an originator, as do his clients in the Leadership 360 program. He shares more about Resetting the Definition of a Good Rate in his weekly business and life tip videos.
Remember that while numbers are quantitative, a good loan officer can also make them relative.