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April 2023 » 53 April 2023 E X P E R T I N S I G H T S mortgages, and then more people began strategically defaulting. The mentality was, "If my neighbors are not paying, then why should I?" This created a snowball effect that ultimately caused the entire market to crash. Today, housing is not the issue. Yes, home prices and affordability are a problem, and prices are coming down in some areas, but the market is still relatively stable. We also have very low inventory, which is keeping home prices elevated. There is a big difference in loan volume, too. Today's volume is the lowest it's been in over two decades. People back in 2007-2008 were still looking to take advantage of what was happening in that market. Because of elevated home prices and mortgage rates, that's not happening today. I have no fear or concern about the cur- rent market. I know some people are talking about a possible crash if prices go down 20%. Every time someone says to me the market is going to crash, I respond with, "Please define 'crash' for me." I never get a clear answer to this question. My thinking is that home prices have been unrealistic since the pandemic started and are heading back towards a more bal- anced level. However, as long as inventory continues to remain tight, the reduction in home prices will likely not be what the market naysayers believe it will be. We are already seeing an increase in purchase contracts in the first few weeks of the year. This means that buyers are accepting current interest rates and that sellers are not being forced to radically lower their prices back to pre-pandemic levels. This flies in the face of what the media is reporting, although we know headlines are often misleading and never tell the whole story. We have a healthy economy and employment, and if this con- tinues, home prices will remain strong and stable and not "crash." Q: What lessons can be learned from the former crisis? The big lesson from the past is to never be complacent. Chasing low hanging fruit and not prospecting can often destroy many origina- tors' careers when rates rise. Complacency will only lead to failure when the market shifts. Instead, continue prospecting and honing your skills so you're always prepared for future changes. And I'm not just saying this because I'm a sales trainer. The originators who are doing well are constantly prospecting, whether it's a purchase or refinance market, so they're able to thrive in any market. Unfortunately, many originators do not see it this way and are very transactional, which results in them only being focused on what's currently in front of them, not preparing for the future. Q: What are three things you'd recommend LOs do to increase their business in 2023? If predictions from the MBA, Fannie Mae, and others are accurate, this year is going to be worse than 2022 for home purchases. I'm even hearing declines of 19% to 25% in loan volume. We don't know if these predictions will be correct, but I'm recommending LOs to prepare as if the market is going to get tougher by being relentless in their prospecting. LOs need to master their skills and be better than their competition. A mindset of "this is what we do" and "I'm going to give good service" is not enough. They must know how to sell and get noticed. Based on my training and coaching experience, I'd say over 90% of originators do not possess these skills. While it's still possible to get business from the relationships they've already built, when you have the top skills and strategies, you can win more relationships and business much faster. The market is extremely com- petitive. Being average in this market is not going to lead to average results—it will result in struggle. LOs must step up their game to thrive. LOs also need to understand sales lag. Most LOs want instant gratification for their efforts, either because they are used to it or because their current financial situation demands it. Sales lag occurs when, even after putting in significant effort, LOs do not see a result for 30, 60, 90, or even 120 days (about four months). There are times when you can get instant results. However, going into prospecting without the understanding and commitment to keep pursuing until the seeds you plant take hold almost always results in an LO abandoning a proven strategy before they give it a chance to yield results. LOs must stay organized, stick with their plan, have the resolve to follow through, and not let the market derail them. The big lesson from the past is to never be complacent. Chasing low hanging fruit and not prospecting can often destroy many originators' careers when rates rise."

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