How Agents Get Clients When Mortgage Rates Drop

Okay, and that’s where it gets crazy, because a lot of people don’t know what to do. What they’ll say is, “I’m gonna call all my active buyers and sellers right now.” But the problem is, they’ve only got two or three people in mind. The ones that are actively looking right now, or the ones that have been on the fence — in all likelihood, you’ve been cultivating those leads for a very long time, possibly a year or two.

If you have any online lead sources like Zillow or pay-per-click type leads, there’s been tons of people who are just looking. Which also means they’re waiting. Most people have been waiting for interest rate drops. You’ve probably talked to tons of people that are interested in buying a home but have used examples like “I don’t have enough of a down payment,” or “I can’t afford it,” or “interest rates are too high.”

There’s also tons of people who have a home to sell that are staying put because of their current rate, and they’re not buying because of the higher interest rates right now. So believe it or not, almost everybody is waiting for the same reason. It’s not the right time to sell or buy — or at least that’s what they think.

Why do people have this mindset? I don’t know why humans are wired to not change, but it is so much easier to stay in our daily routine than it is to change. That’s why people don’t like to do things that are uncomfortable. That’s why they always just do the same things every single day and don’t make the big changes they need to make.

That’s true of all humans. Some people are a little more self-aware of it than others, but they don’t want change. They don’t want help, because that represents change too. So please understand that almost everybody is not buying because they don’t think it’s the right time to do so. If we can start showing them that it might be the right time, that changes things.

So I want to show you a tool that all of our clients should use. All of our teams use it. It’s probably the most powerful tool we have, but it’s a spreadsheet, so it bores people. We call it our inventory pipeline.

What you can see here is we keep a list of all the active buyer leads we have that have not signed a buyer agency agreement of some sort with us. That should be anyone we’ve spoken to that’s looking. We get their name, which agent on the team they’re working with if you have a team — if you’re a solo agent, you don’t need to worry about that. Have we got them pre-qualified with a lender yet? What city are they in? What source — I love to use this as a great opportunity to track where they came from. Was it my SOI? Was it an online lead source? Was it an open house? What was their rough price target? Maybe you’ll know what listing they called on. And then some brief notes about where they are on status.

This is something we must cultivate, because if we don’t, we’ll forget about 95% of them when interest rates drop. Wouldn’t it be easy to go into our CRM and contact every single one of these people via text, via email, via phone call, and let them know: “Hey, we just saw a substantial drop in rates. This may be the time.” Especially if you’re a seller — this might be the time you can get out and make that switch. Right now it’s a window. There’s not a lot of inventory, we have a dropped rate, and we are seeing buyer activity pick up dramatically. This could be the window.

Because if we wait till spring or summer or selling season, when everybody wants to do it — why do they want to do it then? Because they think it’s the right time to do it. The other thing they think is, “It’s not close to that time right now, so I don’t have to do it.” We are humans. We are innately lazy. We want to get through the day doing exactly what we did yesterday. We don’t want any added work. So if we keep updating them — “hey, rates dropped” — it shows we’re watching. It shows we’re treating them like a client.

So we keep a tabulation of everybody we think wants to buy. If they have a house to sell first too, they’re over here on the listing leads side. Once a listing lead moves to an agreement, we move them up, and once that listing agreement goes active, we move them up to our active pending. That means they’re on the market, we don’t have to worry about them as much — not as much lead follow-up needed. That’s a bird in the hand. Same on the buyer side — we’ve got active buyer leads, but once rates drop, we can move them up and try to get buyer agency agreements signed. Maybe we use houses to show as a reason to get them out to do that.

We have to keep a running total. Usually all we do is keep a total of our actives and our pendings — that’s nothing we can do anything about, those are already under contract, we’re not doing anything to get new business there. So we have to have a funnel, because it’s like a boat going over a huge school of fish and you’re a fisherman. When we see rates drop, we have to have all of our potential buyer leads ready, or it’s like going over a school of fish with no fishing poles — “oh hurry, let’s just throw some line in the water and maybe put some salami on the end of it, maybe I’ll catch one,” as opposed to having a bunch of fishing poles ready.

If we don’t stay organized with our lead follow-up, all of a sudden we have nothing to fish with. So we have to have a big pool of people we know that are looking or buying, and maybe it’s a quick phone call saying, “Hey, rates have just dropped, do you want me to give you full realtor access to the MLS so you can start seeing listings?” Because you’re going to start seeing them move faster. We are experiencing an uptick in activity, so I can give you full realtor access so you can see new listings right when they hit the market, before they go to secondary IDX feeds like Zillow. Because the homes that go there typically aren’t the best priced and in the best condition — the most desirable homes go fast because that’s a secondary feed. I want you to see it before all the real estate agents see it. The minute a new listing hits the market, we set up an immediate feed so it goes straight to them, and we can get you into it in a hurry, because the best-priced homes that everybody wants tend to go the fastest.

So set them up on your listing alert drip. The MLS listing alert drip — everybody gets that for free through their MLS, often most of your CRMs do it too — and they need to be set instantaneously. We can set all these people up in a hurry, and all of a sudden they see that we’re staying attentive. We’re keeping them up to date.

Don’t think they know when rates drop. They don’t. They hear it every single day — rates drop 0.001% and that’s headline news these days. So they don’t know when a significant drop happens. Watch for that. Watch what happens to the 10-year Treasury bond yield, watch what happens to the mortgage rate — the 30-year fixed — as a result of it. That’s what we should be looking for, not what the Fed Reserve chairman says. Watch the yield. Does it move up and down? Are people buying and selling bonds? If you see that yield dropping, your mortgage rate’s dropping — it’s tied directly to it. That means people are moving out, they’re selling bonds, they’re moving back into the stock market.

So we’ve got to watch for that, and we’ve got to have our inventory pipelines ready. They need to be ready to go, and that’s when we shift gears and really take all of our lead generation for new business and get a little heavier on the lead follow-up side, because those are birds in the hand. They’ve heard from you at one point — it’s an opportunity to start treating them like a client. They may not be ready now, but there could be another drop, and when there’s another drop, it’s something else to update them on. Now you’re not just calling and saying, “Are you ready yet, are you ready yet?” You’re actually giving them information, showing that you’re watching for them, and it’s a way to move them a little closer to a signed buyer agency agreement or a signed listing agreement.

Get those listing inventory pipelines built. We can have A leads, B leads, C leads if you want. An A lead is like an SOI — someone you know pretty well. A B lead might be someone who’s an online lead you’ve talked to multiple times, maybe got their buyer or seller lead sheet all the way filled out. A C lead might be someone you barely even communicated with, but it’s worth an email, it’s worth a text. Send enough of those out there, and it adds up.

The more of them we can get set up onto listing alerts too, that’s another way — every time a new listing hits, it’s an email from you to them, shows you’re working for them, and that’s automatic every single time. So what we’re trying to do is get them into that client vortex where we’re doing work for them. And if we’re doing work for them, they feel obligated to some degree, depending on the amount of work, and they actually see that you’re the one who’s working for them, the one who’s on top of it. You make it very easy for them to reply to your text, reply to your email, reply to whatever communication method they used.

That’s lead follow-up. It’s a huge percentage of the real estate business, and it’s how we demonstrate our value before they actually agree to anything. So when you hear people say, “Man, I have a hell of a time getting these buyer agency agreements signed” — it’s because you haven’t done the work up front. It’s real easy when you’ve done a ton of work. It’s not what you say, it’s not your script, it’s not your dialogue. It’s what you do, what you show, what you demonstrate. We have to be following up, doing the work, proving the relationship ahead of time. Crucial. Absolutely crucial.

So again — listing inventory pipelines. When rates drop, we’ve got to be building that up. We’ve got to stretch our brain and keep maintaining it for when there’s a big shift in interest rates.