Why Efficient Markets provide a foundation for Service and Relationships to Flourish

My outlook inbox has a constant flow of information and accolades for great service.  Every now and then I see an email that resonates with me and has a deeper message that can benefit others in our industry.  The email chain below is a clear example of an incorrect notion and does not add value in today’s Real Estate environment.

 

Rodney Camren is a very successful Owner and Real Estate Professional.  Not only is he a great partner to Southeast Mortgage, SEM, he understands the value proposition that can be leveraged with a high service Direct GSE Lender.  A great mortgage experience creates new referrals for Real Estate Agents.  If one happy client refers three others, that is efficiency and a win for everyone (Clients, Realtors, and the Mortgage Professional).

My whole career I have heard the brash statement “my rates are lower”.  In efficient markets https://en.wikipedia.org/wiki/Efficient-market_hypothesis there are no deals in stocks or bonds given all relevant information is already priced into them and thus sustainable accounting makes rates the same and relative.  Our economy is built on this theory.  As a result and in my opinion, the statement “my rates are lower because I am a Broker” is false because all Direct GSE Lenders hedge at the same prices assuming identically timed trades.  Brokers have to get product from Direct GSE Lenders given they do not have the certifications to access the markets which creates another level of expense thus their rates have to be theoretically higher than a GSE Lender.

In efficient markets, all GSE Lender mortgage rates will be similar if sustainable.  The only exception is a Lender who artificially lowers rates below sustainability or attaches unrealistic SRP values in an a recovery that does not fit historic molds.  If they do this, they only borrow their future because expenses are generally fixed and unrealized revenue has to be removed resulting in a panic cost cutting effort or closing their doors.  Neither scenario is good for Clients, Realtors, Mortgage Brokers, or their MLOs once the accountants explain 2+2 cannot = 10.   It will eventually = 4 so price for sustainability today.

Thank you Rodney for allowing me to provide a real life experience for our readers so they can modify their prospecting to create a more effective model. 

Sell Service - Sell how you communicate with your Partner’s/Realtor’s - Sell how you are going to fill your Partner’s/Realtor’s OPEN HOUSES - Sell how you get more clients approved - Sell how you will help them sell more homes. 

That is the secret formula all Realtors and Builders want - DO THIS and you will create Relationships that are truly mutually beneficial and long lasting.

This is what Southeast Mortgage delivers.   

-----Original Message-----

'Tom '

Sent: Wednesday, September 09, 2015 1:40 PM

To: Rodney Camren
Subject: Catch up

Afternoon sir, I hope you and the team are doing great!  I just wanted to drop a specific note your way on where I think we could have an opportunity to do a little business together.

I know you have a great relationship with Shaun and he does a great job for your team. I would like to propose that we could be a valuable resource as your #2 option. Everyone needs a couple good folks for the funky situations.

Specifically when it comes to highly rate sensitive buyers who are going to go shop around. I wouldn't want you to get stuck with a client using an Internet lender because the rates were cheaper than Shaun's only to end up with a bad experience.

As a broker our rates are way below the competition and I would love to fill that void for you. I wouldn't want your clients in a weak moment to get stuck with a weak lender:) Let me know your thoughts sir and when we can get together to chat!

Tom XXXXXXXXXXXXXXXXXX

Mobile 678-XXXXXXXXXXXXX
NMLS: 4XXXX9
Sent from my iPhone

-----Original Message-----

From: Rodney Camren
Sent: Wednesday, September 09, 2015 2:28 PM
To: 'Tom '
Subject: RE: Catch up

Tom

Thank you so much for reaching out to me.  I really do appreciate holding me in high value to want to work with me and my team.  As much as I would love to keep you in my holding spot for a #2 we haven't had a need for it to be honest with you.   Shaun's rates and superior service has been untouched. Shaun's continued success in not only his growth but the growth of SEM has been amazing.  He has several of his loan officers that work with all of our buyers at any given moment we need him.   In fact when we get contracts for our listings we have the potential buyers do their pre-quals through Shaun's team.  They usually switch over to him as well.   As far as internet loans, I educate both my buyers and sellers away from those.  I appreciate the BOLD language and terminology and can assure you there are no "weak" links on this team or with our preferred vendors.   I appreciate your friendship and wish you the best of luck with your continued success. However, if you ever need to look for a place of employment, I am all too happy to put in a good word for you to Shaun and SEM.  I hope to see you very soon.

Loyal to SEM!

Rodney Camren

Rodney
Owner, President
STAR Team Atlanta