Overcoming the Up-Front Appraisal Objection
Let’s say that you have a prospect call in and you’re really not sure their house will appraise for enough to allow for a refinance. Sound like all your prospects these days?
In order to alleviate their fears about paying for an appraisal they can’t use, here’s a step-by-step decision making process I’ve found successful:
Determine up-front if their loan is owned by Fannie or Freddie
This way, you’ll have a fallback position. For example, the best case scenario you could hope for is that their home indeed appraises for a straight-up refinance.
a) If you have determined up front that the loan is owned by Fannie Mae… even if the home appraises for less, you have the option of taking the loan DU Refi Plus.
b) Your worst case outcome is if their loan is owned by Freddie, in which case they’ll have to refinance with their original servicer.
In any of these scenarios, at least you know that if the prospect pays for an appraisal, they will have the option to refinance the loan (at least in most situations). So it’s not as much of a gamble – and you have overcome a large objection.
Another strategy you could try is to set up a network of people you trust on the retail side with the big banks. Whenever you get a prospect that has to go back to their current servicer for the refi (Freddie loans), at least you can refer them to a friendly person who is likely to treat them nicely since you referred them a deal. Your prospect will be most appreciative since you took the time to educate them – and they won’t be just calling 800# hell. ðŸ™‚