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Shoppers Are Going to Shop—and You Don’t Need to Stop Them

Rate shoppers. They’re the bane of our existence as loan officers, right? How do we handle them? How can we keep them from shopping? How do we reel them back in once they start to shop around?

The short answer: we don’t. When it comes to rate shoppers, I’d like to offer a different perspective.

I was in a Facebook group once, and a loan officer was freaking out about a prospect who was rate shopping. The prospect had just been quoted a super low rate by another mortgage company, and this loan officer was desperately scrambling for a way to entice the prospect to come back. 

“I was really counting on this one,” he said. “What do I do?”

Two things came to mind: a question and a thought. 

How Many People Have You Pre-Approved This Month?

First, the question: How’s it going with the other 39 people that you pre-approved this month? Wait, you mean you haven’t pre-approved a whole bunch of other people this month? Then you need to get on that. 

I’ve found that, as a general rule, I get one closing for every four referred leads. My team and I have literally closed tens of thousands of loans, so we know a thing or two about it. About half of the referred leads we get are approvable. Then we close about half of those. So, we get four  leads; two are approvable; and we close one. Approvable means they can afford the loan they’re looking for—and they’re buying something we can finance. In other words, they’re not looking for a mobile home on stilts out by the beach.

The one in four that are pre-approvable that we don’t close? They end up not buying or not refinancing—or they end up shopping us. We’ve been around the block a time or two, and we understand this 1-in-4 matrix very well. And we’re not going to waste time trying to change a longstanding industry-wide matrix. 

Chances are, there’s very little we can do to change that on any large scale. The general rule stays the general rule. We close one out of every four leads. Now I’m not talking about internet leads—Facebook, Zillow, etc. Those are like 1 out of 50 or more. So, instead of trying to change the matrix, I’m going to focus simply on getting more referred leads. 

Here’s the thing: shoppers are gonna shop. They just are. Instead of spending a lot of time chasing those shoppers—which, frankly, is like herding cats—we focus on getting even more high-qualified referred leads. That’s the way you really want to ramp it up.

We have four different strategies that we implement to do just that. And don’t worry, there’s zero cold calling, zero magical fairy dust widgets that promise the moon and only deliver a money-sucking noise out of your wallet. It’s almost never a piece of software that’s going to bring in more leads. Software can help you manage them, sure, but it’s not going to bring them in. If you want to hear all four strategies, just go to freedomclubdemo.com and we’ll be happy to walk you through those.

Address the Shopping Issue from the Very Beginning

So, that was my question, and here is my thought: If someone is shopping you, it’s already too late in the process to change their mind.

You need to address the shopping issue on your very first conversation with a prospect. We have a script we use, but it’s imperative that you use it before they start shopping you. Let me repeat this: if they’re already shopping you, it’s too late.

Here’s the easy template: “If I can _______, will you commit to me being your lender on this purchase/refi?”

Here’s a longer version: 

“Okay. Bob and Sue. Based on our conversation and preliminary information, it looks like your monthly payment is going to be about $1,700 with a down payment of $7,000. And the funds you’ll need to bring to closing will be $11,000. So, Bob and Sue, if I can ensure that your monthly payment is $1700 and that you’ll only need to bring $11,000 to the closing table, will you commit to me being your lender so I can commit myself and my team to start working on it so we can close on time and give you the competitive advantage you need in today’s market?”

That last part—give you the competitive advantage you need in today’s market—is from my rascal of a friend, Steve Kyles, that old silver-tongued devil himself. That’s the icing on the cake of an already brilliant script. That’s it. That’s the whole thing. If I can do x, will you commit to working with me and my team? 

Yes, it’s only a verbal commitment. It’s not a legal agreement. It’s not written in stone. But, in my experience, once somebody verbally commits, it goes against human nature to break that commitment. I can’t tell you it will never happen. But it happens so much less often than when someone doesn’t give you a verbal commitment. If you tell someone, “Hey, you can count on me, man,” it’s harder to back out of that. 

If you ask for that commitment, and the person says, “Well, I don’t know, Carl. I don’t think I can commit to you at this time,” that’s fine. We’ve now identified this person as a shopper, and honestly, chasing them is not going to be a good use of your time. 

Finding that out early in the game is so much better than finding out after you’ve put a lot of work in.

It will work out so much better for you if you ask for their commitment early in the game, from the very beginning. If someone won’t commit on that initial call, then we know what to expect, and we’re not disappointed when they do exactly what they’re likely to do—shop us. Shoppers are gonna shop. Now we’re not surprised, and we’re not so devastated when it happens, because we’re expecting them to shop. We knew from the start not to spend/waste a lot of time on those people. 

The true key to all of this is simply: 

  1. ask for their commitment up front
  2. get more referred leads.

You’ll close way more loans going after more referred leads than you will chasing shoppers. Once you have more high-qualified referred leads, then having one individual deal go sideways really won’t ruffle your feathers as much. I hope that makes sense.

If you’d like to hear more about our strategies for getting more high-qualified referred leads, we’d love to chat with you. Give us a call TODAY to set up a FREE strategy call.