“Guess what, consumers! Conforming loan limits were just raised! Awesome, right!? Call me!”
“Woo hoo! FHA just increased loan limits! Give me a call today!”
“Fannie and Freddie just did…”
“FHFA just announced…”
Rates! Bond charts! Comps! CMAs! 15-year fixed! Jumbo! Blah blah blah.
How many of these posts do we see on social media from our fellow agents and lenders every day? Like, a bazillion! Probably more like six bazillion, if we’re being accurate. Certainly every time a loan limit is increased or interest rates make a big move.
Dustin Brohm, HousingWire Columnist
It’s not necessarily the topic that is the issue, it’s the delivery of the topic that’s the problem.
Do you know what was missing from 5.999 bazillion of those posts? An explanation of what in the world a conforming loan even is! An explanation of how a major move in rates actually affects consumers’ purchasing power. Nothing tangible, just generic, unhelpful nonsense.
I can count on one hand how many times I saw a lender saying something tangible and actually helpful. Something like “this interest rate bump means the monthly payment on a $300,000 loan went up x-amount.”
Nope. Instead, just the same old crap that consumers “love” like, “Rates are going up! Better buy now! It’s never been a better time than right now!”
If you can’t educate consumers, you can’t help consumers. And if you can’t help them, then what the hell do they need us for?
After all, there’s an app for that now, isn’t there?
Do we realize who we’re actually talking to? You know, those people who aren’t in the real estate or mortgage industry. As in, the exact people we want to hire us. The people we spend ungodly amounts of money on each month just to get a chance to talk to.
Then we get our chance, and we pepper them with meaningless industry jargon! Smooth move, bro. Maybe the next $300 Zillow lead will be “the one.”
It’s truly stunning how little thought agents and loan officers put into crafting the messages they’re putting out there. They just copy a HousingWire headline, which is full of industry jargon (you know, because it’s written for the industry) and then turn around and use that exact terminology to tell consumers about it.
This topic has been a bug up my butt for years. It always makes me cringe when I see consumers talked over and confused rather than being educated or informed.
These last couple weeks especially, I’ve really been screaming about this on my podcast, my Alexa flash briefing, on social media, and anywhere else I can get agents and lenders to hear me. We’re only causing more confusion and noise, and adding to the perception that Realtors and lenders aren’t approachable or relatable. I yearn for the day that we stop proving that to be true.
So why do so many Realtors and loan officers talk over the heads of consumers, with no explanation or education included in the message? Is it arrogance? Is it laziness? Is it a simple lack of thinking through who we’re talking to and the language they actually speak? Unfortunately, I think it’s a combination of it all.
Do we realize that most agents, let alone consumers, don’t know what a conforming loan is? Many consumers don’t really know what an FHA loan is or what “comps” are.
Sure, they may have heard the terms before, but that’s it. They don’t understand the nuances of an FHA loan versus Conventional. A staggering number of consumers still believe that you must have 20% down to buy a home!
Again, they are not industry insiders. You are.
Don’t ever assume that consumers know what industry-specific terms mean or what the differences between loan programs are. Not everyone knows what an FHA loan is, or how it differs from Conventional or VA financing, and what that means to them. Don’t ever assume that an increase in loan limits means anything to anyone. Because it doesn’t. Again, most agents don’t even know themselves.
We have to explain these concepts. We have to educate and advise; teach and simplify. But more than just explaining, defining, and pontificating, we have to relate this stuff to the consumer.
What does an increase in conforming loan limits mean for them? How does that affect their ability to buy a home? Explain to your sellers that loan limit increases are good because the pool of potential buyers for their home just got bigger.
Don’t just tell consumers that interest rates went up or down. Show them how that affects their purchasing power. Does the change in rates mean the difference between a budget of $300,000 versus $330,000? Tell them that!
If rates are going up, don’t just give consumers that tired old line of “Now is the best time to buy or refinance because rates may go up even more!” Show them how it’s not the end of the world. Have them Google “Jimmy Carter mortgage rates” and magically, 10 seconds later, the jump in rates doesn’t seem as big of a deal anymore.
Be a guide, a reliable, trusted resource to help consumers cut through the noise from all of our competitors who do nothing more than litter the internet with meaningless industry jargon. Anticipate the questions they may have and answer them up front. Many times they don’t even know what questions to ask. (Remember: They’re not actually agents or lenders!)
In this age of (too much) information, consumers are completely overwhelmed. They’re begging for clarity. They’re craving it.
If we don’t get their attention and gain their trust by being truly helpful, then some app will. Some Silicon Valley company with $1+ billion in funding and a huge marketing budget will come in and set the narrative.
None of us stand a chance against that if all we’re doing is confusing consumers and driving them into the hands of that fancy new app.