Handling rate resistance (with a powerful objection response)

Jake Vermillion	Welcome to Up-Market Sales Success, a series designed to help busy loan officers just like you make the most of high-volume markets. My name is Jake, I'm a member of the Mortgage Champions team, and we are incredibly excited to bring this powerful offering to you. Let's dive into the topic at hand, Handling rate resistance (with a powerful objection response), with Dale Vermillion. In this installment, we want to explore how to overcome one of the most-common obstacles to sales: rate resistance. Dale, you're known for preaching that Rate Doesn't Matter™. Can you expand on that philosophy and how it sets the foundation for effectively addressing rate concerns?
Dale Vermillion	Absolutely can Jake, and it begins by understanding rate's role within a mortgage transaction. That's where the foundation really lies. So, I want to remind everybody of a couple of really important things. First and foremost is this: that the reason everybody asks you rate up front, and then the reason everybody objects to rate on the back side is because they're supposed to! They've been trained to. You've got to remember that you're dealing with a lot of factors in rate resistance. You're dealing with pride and ego. You're dealing with competition. You're dealing with a desire to win. You know, you're dealing with everybody just looking for the best deal so they can brag about it to their neighbors and friends. You've got a lot of factors. But here's the bottom line—I want to remind you of the bottom line always—”if you were to ask any customer on the planet this question," What are you trying to achieve by getting the lowest rate?" Ultimately, it's going to come down to the same exact answer. And that answer is they're trying to save the most money they can. And the moment they say that, you now are in a winning position to overcome. Because here's the deal, look, although rate is obviously an important part of a mortgage it's only one piece of a big puzzle. There's a lot of pieces to the mortgage puzzle, rate's just one of them—and it's not necessarily the most important. Here's what I know rate depends on a lot of things. This is why we can't quote it up-front because we can't really know what the rate is till we know not just their qualifications, but their situation, and their goals, and the type of product and program we've got to put them in, and the LTV, and the down payment, and the list goes on. And we also know that getting the lowest rate and getting the best rate are not necessarily the same thing, because the bottom line is you can get a low rate and a bad loan. What we know is this, that at the end of the day, saving money is what everybody's looking for. That's the key to understanding how to overcome rate objections and resistance. It's showing your borrower how—no matter what your rate might be—you're providing them more savings, and a better loan, with better service, and better relationship, and a more trustworthy person. That's the essence of rate overcoming.
Jake Vermillion	Having a foundational understanding of why rate really doesn't matter. How can loan officers, first of all identify rate objections, and then secondly proactively overcome them in a way that maintain sales momentum?
Dale Vermillion	Great question. You know, that the one thing that I've seen my entire career is that many times we as salespeople confuse an objection with a stall. They are two different things. Let me define them for just a minute, okay? So, an objection is when somebody has a concern or a question about your rates or about some part of that loan offer. Here's the bottom line: if they have a concern or a question, that's actually a good thing. That shows interest. The first thing I want you to understand is that objections are actually good. They're not bad. You want them because it shows interest. It shows they're considering you. It shows that they're actually in the game. Now, a stall on the other hand is the scenarios where people say things like, I need to think about it. I need to sleep on it. I need to talk to somebody about it. A stall is literally a delay to avoid commitment and it's usually built around an excuse because there's something they don't like. In other words, they've got a hidden objection. So when we talk about objections, understand that objections are where there's something you fundamentally don't like. A stall is where you're just trying to stop from making a decision. You're trying to delay that decision-making process. If It's a stall, we need to remove it by asking a question. The question is, "What's keeping you from moving forward? What is your concern?", so we can actually get to the objection. Because you can't overcome an objection unless you pull it out. Now, having said that, here's the key: once you get that objection, what you need to do is you need to isolate the objection. And what does that mean? That means that when they bring the objection out, you've got to make sure that you get to a deep understanding of it. And there's a couple of real simple tips here. The first thing is you want to make sure that when you get that objection and they say, "Hey, I've seen lower rates. I've been quoted better fees. I believe I can get something better.", just agree with them. One of the biggest mistakes we make is we try to argue with them instead of just agreeing with them. Agreeing with them and do this: don't knock the competition. Sometimes we'll say, "Well, who told you that you can have that? Well, those guys don't have that." Don't do that! All I want you to say is, "I'm sure you were quoted that. I'm sure you were told that." And then instantly educate and isolate. So, you educate them by saying, "Okay, but now let me ask you a question: that deal that you got, tell me about that. You got an offer from a company for that rate. Tell me about that offer. Did they complete an application? Did they do all the information? Have they verified everything?" And all of a sudden you're going to get them to a point where they're like, "Well, no, I haven't. No, I didn't." And now you're starting to isolate that objection and say, "Okay, so Mr. Jones, if you've been quoted a rate, but they've not completed that, then here's the bottom line: that's not comparative to what I'm showing you. Let me show you how I'm saving you more money in more ways and doing more things," and always go back to your benefits to overcome those objections. If you do that, you're going to win big. And sometimes you can use an old principle called the feel, felt, found, where when somebody says, "Yeah, but you know, I don't want to go forward unless I've gotten that..." Look, "I have a lot of people that feel that way. The bottom line is they felt that they could get a better loan. What I found is many times that better loan, they were offered just didn't have the same components or the same terms or the same benefits or the same cash out, or the same kind of advantages or could close in the time that I can." And when you start to weigh with them the differences between the rate and your benefits, the rate and your service, the rate and what you're doing for them that's saving them more money, they're going to go with you at the end of the day.
Jake Vermillion	Dale, any parting thoughts on this topic? Obviously this one is in your wheelhouse.
Dale Vermillion	I could talk for hours on this as you well know Jake, but here's what I would close with—I want to remind you of one of the most important rules you got to remember when you're dealing with rate and when you're dealing with objections, and that's this: there are only three components to a loan. Only three. There always has been, and there always will be. Those three components are: the payment, that's the monthly cost; the loan amount, that's the cash; and the term, that's the payback. Rate is not one of the three primary components of a loan. So, they're focusing on something that is only a sub component of the payment—because rate only affects payment and nothing else. What you need to do to overcome the objection is isolate the fact that rate is a small part of the equation. And now show them how to get the best loan amount, that gives them that cash they need, at the best payment that they can afford, that creates the most savings, with the term that matches their long-term goals. You do that, you overcome rate every time.
Jake Vermillion	Before you go take a moment to celebrate the fact that you've made it half way through Up-Market Sales Success! It may just be a couple minutes every day, but hey, look, you've stuck with it and I promise you: you will be better off for doing so. While it may take some time to see results, if you are already seeing impact to your business, we would love to hear about it. Just click the link in the show notes to share your results. And don't forget to complete today's Skill Challenge by taking the feel, felt, found approach with your next rate objection, and then let us know how it went by clicking the feedback link in the show description. Coming up next, Expediting the application (while securing relationship).