How can brokers get ahead in a tight market?

How can brokers get ahead in a tight market?

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How can brokers get ahead in a tight market?



HousingWire recently spoke with Jon Irvine, Chief Production Officer at Change Lending, about how brokers can gain a new competitive advantage in the current tight market.

HousingWire: The current inventory shortage doesn’t seem like it will let up anytime soon. What challenges does this present to brokers?

brokers

Jon Irvine: First, refinance volume has already dropped significantly from 2021 to Q1 2022. MBA estimates refinances will drop over 60%, but in my opinion, given the current trajectory, it could drop as much as 80%.

As a result, brokers will be forced to look to the purchase market to fill their volume needs. The combination of the slowing refinance market and the current inventory shortage has made fulfilling volume needs even more challenging. Since there are fewer houses on the market, naturally, there will be fewer purchase transactions as well. With that in mind, everybody is going to be working harder for their piece of a much smaller pie. Overall, it is stressful and hard on business.

HW: What are some ways brokers can gain a new competitive advantage, despite the challenges you mentioned above?

JI: The first thing brokers must focus on is their service and ability to close loans on time. Purchase-money transactions are particularly sensitive because brokers are often working with a referral partner in real estate. The ability to close loans as of the contract date is important for the customer and it serves to strengthen relationships with referral partners too. To stay ahead, brokers must find a lending partner that understands just how beneficial this is.

Another thing that can give brokers a competitive edge is the ability to align themselves with a partner that has a full suite of products that can serve a diverse set of borrowers. Not all borrowers will be able to secure a traditional mortgage. Having the ability to help various types of borrowers can really take a broker’s business to the next level.

HW: How does…