There I was last evening, tucked into my hibernation pod for a little recharge of my alien cranium, when suddenly, an alarm went off in my spaceship. Looking through one of the port windows and seeing darkness let me know that it wasn’t an alarm to stir me awake for the day ahead. I quickly forgot all about the alarm when I realized that my window was all blurry, like the exterior of the ship had just been slimed, a popular childhood prank on my home planet of Amicitia.
The alarm startled me out of my daze, so I slid over the to main console and found a blinking crimson light—the exterior condensers were malfunctioning. That’s something new, so I thought I better take a look. All the port windows had that same glaze as did the exterior access hatch. It was, in your Earth terms, frozen over. Those condensers not working has permitted my ship to become encased in ice. It looked like some type of novelty ice sculpture you see humans creating with large, smoke spewing cutting devices.
As I evaluated the situation, it quickly occurred to me how tough this weather situation is going to make it for me. Tough to see out my windows; tough to open the exterior hatch; tough to write this blog, as I’m distracted by the frigid circumstances enveloping me and my domicile. Never fear that my blog post would be delayed—I had some instant pumpkin spice latte stowed away that instantly warmed my body and my tentacles.
Tough. That word stuck with me because we all deal with tough situations throughout our personal and professional lives, human and alien alike. This includes the credit union mortgage industry, where the toughest thing I’ve noticed in our industry over that last couple of years is the ongoing seller’s market. Oh, no, it’s not tough on the sellers. In fact, it’s anything but tough because what they’re selling is in limited supply. That, in turn, makes it tough for home buyers.
And with continued low interest rates (yes, they’re creeping up but still extremely great rates!), it’s like implanting granules of sodium chloride into exposed dermis—or in layman’s terms, like pouring salt into an open wound. Buyers have great mortgage rates available to them but no homes in which to invest. With the purchase market ramping back up, we’re going to continue to see this. Despite the traditional spring home buying season and a greater inventory of homes, it’s still going to be tough.
As a credit union mortgage lender, how can we guide our members through this tough market and help them find the home of their dreams? There are several tools and services at our disposal that every credit union should be employing, including:
- Prequalification/Preapproval: You may hear these terms interchanged but be sure to clearly define them for your member so that you’re all on the same page. Both provide important guidelines your members need as they search for their home. However, a prequalification is generally based on the member’s self-reported data (not verified by the credit union) while the preapproval is issued after the credit union verifies the member’s financial information.
- Various Product Options: Each member is unique, as are their wants and needs associated with a new home and the accompanying mortgage. By offering a good mix of products, you can help more members and find a loan that delivers what they need. I discussed the importance of this in a previous post—be sure to check out Diverse Products for a Diverse Membership.
- Working with a Realtor: I mentioned this in my most previous post—in a purchase market, it is vital for credit union mortgage lenders to establish and foster solid relationships with Realtors. They work on your member’s behalf and have the tools and experience to navigate through even the toughest seller’s market.
- Use Available Technologies: You know those Realtors I just mentioned? They can set your member up with automatic listings, so they don’t miss anything coming in their local housing market. And with this seller’s market, “delayed listings,” which are houses not available for showing yet, are becoming a solid seller’s market tactic.
- Tell them to Ask Around: Never underestimate the power of networking and word-of-mouth. Encourage your member to network during their home search. You never know where you might find a lead on a house, so tell anyone who’ll listen—hairstylists, co-workers, dentists, your alien living next door, etc.
- Letter to the Seller: I’d heard about this tactic but never put much thought into it, that is until I witnessed it working on multiple occasions! Having your member pour out their feelings about a house becoming their home can be an effective tool to sway a seller with multiple offers to accept theirs.
- Keep an Open Mind: I blame it on HGTV, but many home buyers have unrealistic expectations for the perfect home. You don’t want your member to settle, but you need to help them realize that they need to make realistic concessions. With a limited inventory and a competitive market, a home that checks “most” of the priority boxes could be just the home they’re looking for!
In this tough seller’s market, it’s important that your members be patient, persistent and work with their credit union. Their home is out there, and they will find it if they stand tough!
You know who else has been standing tough? Our Cincinnati Bengals! Faced with the toughest road to the Super Bowl, their patience and persistence in each game has delivered a great opportunity to be the best in the league! Those tough Bengal tigers remind me of Amicitia’s Dinofelis, so I became a natural fan.
No matter which team you’re pulling for, here’s to a great game. Good luck to the L.A. Rams, and for my fellow Bengals fans—Who Dey!