In July 2020, interest rates dropped below 3%, causing a surge in refinancing. Title & Escrow companies were overwhelmed with demand, as consumers rushed to take advantage of the low rates. Many companies were unprepared for the sudden influx of business.
National companies had already secured deals with major banks and lenders, leaving others scrambling to compete. As the market heated up, companies began offering rock-bottom refinance rates to attract customers, even if it meant operating at a loss.
By August, the competition had intensified, with companies racing to offer the lowest rates and secure business from the remaining lenders. This cycle of price competition continued for almost two years until interest rates cooled down in mid-2022.
The key lesson from this experience is that vendors who fail to position themselves in a market before it takes off are forced to compete solely on price. However, with proper preparation, companies can capitalize on market opportunities and avoid the race to the bottom.
To succeed in the upcoming refinance market, companies must start positioning themselves now, as rates are expected to decrease further. By establishing strong relationships with local lenders and offering value beyond just price, companies can differentiate themselves and attract business even as rates drop.
By proactively engaging with lenders and positioning themselves as trusted partners, title companies can secure a share of the refinance market and benefit from increased business as rates continue to decline.
It’s essential to act now and establish a strong presence in the market before rates fall below 6%. By taking proactive steps to engage with lenders and offer value-added services, companies can position themselves for success in the competitive refinance market.
By focusing on building relationships and offering personalized service, title companies can differentiate themselves from competitors and capture a larger share of the market. Engaging with lenders early on and providing value beyond price will be crucial for success in the evolving refinance landscape.
It’s a Win! Win!
The decision is straightforward and you hold the power.
Will you take on this simple positioning initiative? Or will you follow the traditional reactive approach and wait for lower rates, chaos, and a race to the bottom?
Darryl Turner, CEO of The Darryl Turner Corporation.
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