“Realize the Reality”

It’s time for everyone to catch their breath and examine the reality. The mortgage industry seems to thrive on drama, and there is no shortage of paper tigers out there for the drama lovers to be in fear of.

First we are having everyone throwing themselves around “margin compression”. Yes, the people who are grossing five points a deal, or originators who think they are worth two points a deal or more, are likely going to face challenges, but the rest of the industry will follow the lead of those already leaning out their teams to be more efficient and effective. Technology has made it very simple to do a great job and close eight to ten units a month without any help.

Next we are dealing with the nonsense that rising rates will hurt the housing market. The facts simply don’t bear that out. Now maybe those originators that have thrived in the refinance area will struggle, but those who always kept focus on the purchase market will continue to have plenty of opportunities. The truth is, the last six times interest rates went up 1% or more in a year, the housing market still rose from 3% to 13%. As Steve Harney at KCM has discussed, home affordability is actually better now than before if you do the math!

Last but not least is the whole issue with Gary Keller and his plans for Keller Mortgage. Gary is a smart businessman and is certainly welcome to his opinion. If he wants a mortgage company, it’s his money! But before you all panic, let’s go and look at some numbers.

According to NAR, there were 5.5 million home re-sales in 2017 with more than 600K new homes being sold. A portion of that, just over a million involved Keller Williams. But before you freak out, remember that each transaction contains “TWO real estate sides” or more than twelve million sides (Listing/buyer).

If we just keep it simple and say half the business is listing sides, then they were only involved in about 500K or so buy sides. Since even the best in the business fail to secure 40% of their buy side transactions, but even if they got everyone of those 40% it would come down to about 200,000 transactions. The issue becomes, what will they get? Will their top people toe the company line? Statistically speaking, they won’t. Top producing agents often shy away from in-house lenders. Many Keller offices already have in-house people; will they really secure all of those relationships? I think not, but if they did it would be about 4% of the total market! In perspective, FSBO transactions totaled almost 500,000 units! Anyone focused on the FSBO market?

But here are the two points I am trying to make:

  • Keller Mortgage will have to compete for the business and show it can provide an exceptional experience and on-time closings, while mastering the ability to the job with a low paid team. Maybe they will reduce commission splits or services to their agents? Maybe their agents will happily give up their current relationships and support because they drink the Keller Kool-aide? Maybe Keller customers won’t care about the experience or the rates or getting the right loan and closing on time?
  • 65% to 70% of all purchase leads DON’T come from realtors! In fact, managing your database through value and working with all the other referral sources is cheaper and takes less time! If you are doing your job properly, you will have more opportunities to refer to realtors than they refer to you!

I welcome Gary Keller and Keller Mortgage into the mix of mortgage professionals. Once they navigate all the compliance issues and train all their agents with RESPA and the MAP ACT; figure out the retention rates of their business and their current agents they will then get to see if they can attract the mortgage personnel needed to do the job and satisfy their people. It will be interesting to watch.

For those of you who are worried; pay attention to what you need to do to grow your database and supply it with ongoing value. Compete with a quality customer experience and the knowledge and speed that others can’t provide. Also, work the relationships of all the other agents who compete against those who want to be a one stop shop. There is much more opportunity than you think, just focus on what makes you better, not what you think you might be losing!

Interested in closing more loans.  Check out my ACCESS program and my Spring Special offer.  For a limited time, you can get ACCESS for only $19.99 per month (regularly $59.99 per month).  Use code Spring2018 when signing-up.  Find out more, click here.

Questions or comments: Mike@IMTcoaching.com

“Taxes may be taxing!”

Welcome to April and we all have an obligation to get our taxes filed this year by April 17th. This will be the last year of filing taxes under the old tax code. The new tax code took effect on January 1st 2018 and we will deal with that next year. Or should we?

You see, many of you who are reading or watching this are W-2 employees of companies and have a fairly significant number of unreimbursed business expenses you have deducted every year. Well, until now!

The new tax code takes away many deductions you used to have and replaces that deductibility with a higher standard deduction and lower rate tax brackets. For some, these will not be enough to offset what we once deducted.

You should really take some time and compare your 2017 tax return with what it would look like under the 2018 tax code. You might be very surprised! At the very least, spend a few minutes with your tax preparer if you haven’t already and learn what you might have to be doing differently, or if these changes may require you to make some changes.

Managers and employers, you really should sit with every commissioned sales person and talk about the new tax code and what you might be able to do in restructuring your compensation plans to assist your people. Remember, it isn’t how much you earn, but what you get to keep!

Take advantage of the spring special, get “ACCESS” for a special low monthly rate, and just go to the website a look for yourself. www.IMTcoaching.com

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Questions or comments: Mike@IMTcoaching.com

“Beware the April Fool!”

Okay everyone, time to really pay attention! April has the making for a very volatile month. It is very important that you be paying attention to all the different things that are going on and will make an impact on the rate markets.

This week we deal with the “Jobs Report” and all that goes along with it. In addition to jobless claims, we also find out the unemployment rate and hourly earnings. This will be a key factor on the inflation front. We all know that mortgage rates aren’t a fan of inflation!

Next week we have both the CPI and PPI data, along with the Michigan Consumer Sentiment and the FOMC minutes. Again; this is more data that the markets will look at and make choices about direction and volatility.

We are also facing the further reduction in bond purchases this month, and given past history, that reduction on the buyer’s side of the equation will pressure the rate market.

As a mortgage professional, it’s really important that you track these events and understand what they mean for the rate markets and your clients! You can’t afford not to know! Your clients will hear only pieces of information from the media, and sometimes confusion will cause drama and panic!

You can’t be caught off guard and not be prepared. Locate public sources of dependable information so you have the facts to share with your people. Remember, your referral partners need this information as well.

If your clients start to panic, it is important to walk them away from the edge! Do NOT be dismissive of your client’s fears. Resolve the issues with facts and actual impacts of a changing market. People panic with rising rates but fail to work all the way through the actual costs of rates rising. So do the math with them!

Use calming words like “I hear you”, and “I understand your concerns”. People want to be heard! NEVER us words like “Don’t worry about it” or “It’s no big deal”.

You will find that working through the issues with patience and professionalism will help you work your clients and referral partners off the edge and realize that we are still in a great home buying market and in most cases; we are still a long, long way from even the forty year average of 8.26% on 30 year loans.

  • Get the facts!
  • Listen to the challenges.
  • Offer reliable information.
  • Work through the math.
  • Put everything into context!
  • Share the cost of waiting in your market!

Nobody likes higher rates and volatility. But rates are likely to go higher still over time and so will the price of housing! So act like a professional and an expert. Only a fool would ignore the possibilities of a market reaction to all the information coming in April!

Also, for specific strategies and support, take advantage of our Spring Access Special for only $19.99 per month! Go to the website for more information: www.IMTcoaching.com

Ready to start ACCESS for only $19.99 per month?  Use discount code spirng2018 here!

Questions or comments: Mike@IMTcoaching.com

“You get 100% of what you DON’T ask for!”

I just returned from a few trainings in Texas. It was nice to start the spring training season with originators in the great state of Texas. As with all trainings, it’s about sharing solutions and connecting the dots to the desired result. I always start by asking a series of questions about what the specific group I am talking with that day is experiencing, and where they are facing challenges. This past week was no different, but some of the answers were.

So many people were concerned by the fact that mortgage rates were rising. They almost all had bought into the belief that higher rates meant less business. While the main stream media may have the general public buying into that nonsense, Steve Harney of KCM put out a great post about how that it simply isn’t so. In fact, Steve’s chart shows that the last six times rates have moved up 1% or more in a year, housing prices went UP from 2% to 13% during the same time frame.

This is really important information, and mortgage professionals should be connected to solid sources of information. Steve Harney and The KCM Crew, do a great job. You should all be connected and following on Facebook®!

The other questions all seemed to center around generating new opportunities without buying leads. I shared that I never have my clients buy leads; I teach them how to generate opportunities from their day to day activities.

Start with the basics:

  • Collect 9s and 10s from everyone!
  • Connect with the listing agent on all of your deals.
  • Contact the seller on all of your purchase contracts.
  • Talk to the neighbors around each open house.
  • Engage the seller on each open house.
  • Connect with all your Realtors® by phone not email.
  • Talk to your database in person twice a year!

I know what you are thinking, most of these aren’t going to work, or that you already do a few of these things, but you need to do all of these things every time! You see, it isn’t about the deals you don’t get, it’s about the ones you do! Are you going to get all the sellers on your purchase contracts? Of course not; but you can get 3% on average. Now that doesn’t sound like a lot, but do the math. One thirty second phone call and stamp costs you fifty cents! What is the return in your market?

The neighbors around the open house and the seller of that home can result in as much as a 20% hit rate and possible listing opportunities for your agent. Is it worth spending the time and energy to do the work? You do the math!

We don’t build a real database and the people that do, often don’t engage personally with their closed clients. Why not? Statistically, one out of every 8 people is moving this year. How many of those will you get? How many of those in your database know someone moving? Will you get that referral? Not if you don’t ask!

You get 100% of what you don’t ask for! If you aren’t asking, you aren’t getting! You don’t need more leads; you need to convert the opportunities that are presented to you every day!

For strategies and solutions, visit www.IMTcoaching.com and take a look. If you are interested, we are running a Spring Special to get you ACCESS for just $19.99 per month! Just use the coupon code SPRING2018 at checkout and do something today that improves your tomorrow!

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Questions or comments: Mike@IMTcoaching.com

“It’s time for the TALK”

The time has come for all of us to have “THE TALK”. No, not the birds and bees talk, the talk about what you do and who you are as a mortgage professional. So much conversation, and quite frankly whining, about “margin compression” and how the big retailers and real estate companies are starting their own mortgage companies has got to stop. Step back and take a minute to look at what is really going on. There has always been a great deal of money to be made in the mortgage industry. So much so, that it had to be regulated down from criminal to just obscene. In the not to recent past, loan pricing was based on whatever you could get someone to agree to pay. I remember when high cost loans were first talked about and you could hear the complaining by people on how they couldn’t make 8 or 9 points on a deal anymore. L/O compensation drove more off the cliff when originators were “forced” to make the same money on every loan and not benefit from being able to generate more profit and commission based on the price and program you put the client in. Somehow, the industry survived. Yes, a large number of originators left the business, but I think we are better off without them.

Today you hear it again, but this time it’s, “margin compression is going to put me out of business”. Or Amazon, Costco, Quicken, or any number of other people is going to “steal” all the business!” Oh please! Technology has made for productivity and efficiencies in the mortgage business, which has great reduced the amount of people and time it takes to complete the loan process. So if there is less time and energy involved in actually closing a loan, why should that become reflective in the cost out to the street? I’m not saying everyone needs to prepare for call center commissions of 10 to 40bps; but we all know that there are originators out there still working on 200 basis points or more! That’s not the gross margin on the loan; it is just the originator’s commission!

There is always a price point at which no matter how great the service or speed, you price yourself out of the market. There is also the reality that if you sell price, you are going to lose business to those who will work cheaper than you, or lie better than you! Either way, it doesn’t work well.

We are in a fork in the road that leads to defining what and who you are in the business. You can be a price based call center provider, or you can be value based relationship focused provider. Pick! Either way, your choice! And before you say that millennials are only interested in what they can find online at the cheapest price, these are the same people who pay $5 for a cup of coffee!

You have to know your customer. You have to know your referral partners. You have to understand what you do and the relative value you bring to the table by way of the customer and referral partner experience. Just like the Starbuck’s® sitting across the street from the Dunkin Donuts®, both are in business and make a profit. Both have loyal customers and a great product. Both sell coffee. But the experience and the price of that experience is vastly different. They are completely different customers. While there may be some crossover from time to time, people find their own value proposition and make a choice. Dunkin Donuts® has to make a profit and so does Starbucks®. One sells coffee for $2 and the other $5. One can’t go lower and still be profitable, and the other can’t go higher because it will exceed its own value.

So each of us has to look at where we are, where our business comes from, the value and the experience we provide to our clients and referral partners. We have to determine what and who we are as providers, and determine who our client is and market ourselves to those who will find the value in what we do and how we do it. It’s almost never just about price; it’s almost always about the value. Nobody wins every deal and every customer. The good news is, you don’t have too! Are you going to be able to survive doing three loans a month? Not likely. But technology has given us so much more benefit; you can easily get to 5 or more with just a little more focus and a plan!

Questions or comments: Mike@IMTcoaching.com

Ready to jump-start your productivity and closing rate?  Visit http://imtcoaching.com and get started today.

“Mornings aren’t mandatory”

Much has been made lately about getting up at 5am and pushing hard to get your plate clear as quickly as possible. As someone who is a morning person, I agree that getting up early and getting things accomplished is a great path to follow. But what if you aren’t a morning person? Are you doomed to failure? Is it not possible to be successful if you can’t get going at the crack of dawn? Of course it is. It is not only possible, but the mortgage industry makes it very simple to be successful work at any point on the clock!

The idea that the quality of work is somehow better in the morning is nonsense. The quality of work is determined by the skill of the worker and their attention to detail. While it is true that morning people like to get up and get going, it’s not mandatory to make your mornings count. While there are certain times of the day that specific tasks need to get done, nobody is hanging on your availability at 6am, nobody!

I have worked with very successful people who never got started before 10am. I myself often schedule my Wednesdays from noon to 8pm so I could accommodate clients that worked during the day and wanted an evening appointment. One top producer I have worked with worked a split day, a few hours in the morning until early afternoon, then back at it from 7pm to 9pm. The facts are pretty clear that if you schedule the work you need to get done, you can control your time pretty easily with a little practice.

Now I know that many of you will say “I need to get these things done before people interrupt me”. “I need to get these things done before I get busy”. Come on now! Do you not have a door you can close? Doesn’t your phone have an off button? Are you so mentally weak that you can’t remember to close the door and turn off the phone?

So schedule your way to success in the way that works best for you! You have voicemail, email, video, autoresponders, and the ability to set your schedule to handle the three things you have to accomplish each day:

  • Prospect for new business/relationships
  • Process the information received from prospecting
  • Manage the communications from the top two items.

Once you understand the tasks you have to complete and the time it takes to get them done, it becomes fairly simple to schedule your success at the times of the day that work best for YOU!

Yes, you can certainly “win the day by noon!” But you can also win the day in the afternoon and the evening if that part of the day works best for you! So morning people; go ahead and get out of the gate early. Late risers; know that it’s not how you start the day that matters, but how you finish it that matters.

Success scheduling; something else you can do today that will help improve your tomorrow!

Questions or comments: Mike@IMTcoaching.com

Or visit us online at http://imtcoaching.com

“The Invisible Wall”

I had to dedicate this blog post to a man I never met, who did something before I was born, that gave me an example of life and the limitless possibilities of what can be done if you don’t listen to those who say it can’t be done!

Last week, Sir Roger Bannister died. You may not know who he is, but if you have ever heard me speak, or have been to one of my trainings, the odds are you know him well enough to know that he changed the world in 3:59.4! Roger was the first man in history to run a mile in less than four minutes. Why this was so special was because the entire world said it couldn’t be done. Doctors and scientists around the world said it was impossible. It was a medical “FACT” that the human being was incapable of doing this. It was said the heart would explode, or your muscles would knot up, and every other “PROVEN” reason that a human could run a mile in under four minutes. And it was true until May 6, 1954 when Roger Banister did what they say couldn’t be done. He ran a mile in 3:59.4 and changed the world!

Now why is this so important to me? Because when I was born, I was premature and the doctors said I wouldn’t survive. When I was six, I caught rheumatic fever and scarlet fever, and they said I wouldn’t survive. When I got into the loan business, those who worked there said you could only do a million dollars a month in business, until I did more; a lot more! The point is people will tell you things that they believe to be a fact, when it is really just a self-limiting belief! Look at Roger Bannister, he did what they say couldn’t be done, but within six weeks of him doing it, someone else ran a mile in under four minutes, and six weeks after that, someone else did it. Today, high school kids are running the mile in under four minutes. In fact, the current world record is 3:43.13.

The point is we often limit ourselves because of other people’s beliefs. We fail to accomplish all that we can because of what other people think, or because of what they have told us. We set such low expectations because other people around us help us limit what we can do by what they themselves expect from us; which is why in my coaching program I set the expectation at a minimum of 8 closed loans a month. Why eight loans a month? Because it is more than double the national average and a place where a single originator with no other support other than their processor, can easily close with a great customer experience, in fifty hours a week or less without any other outside help. By setting that expectation, it forces all of those in the program to expand what they think is possible, and certainly what they think is “normal”.

Just because the “average” originator closes less than four loans a month, doesn’t mean that is you! Now since 70% of the industry is below that in monthly production, just think about what the others must be doing? Well, about 21% find that 8 unit a month average. About 9% are doing even more! So imagine what can happen when those people in that lower 70% group remove those self-limiting beliefs? Well, in my experience, about a third of them go on to get to the 8 loan a month average. Better than that, about a third of that third keep going to do more than ten loans a month! All because they changed their beliefs enough to make the structural changes in their business to make it happen!

So thank you Sir Roger Bannister! You are my hero and the inspiration behind my thinking that anything is possible if you first believe that it is possible!

For the tools and strategies to help you go from where you are to where you would like to be, please visit www.IMTcoaching.com and see what you can do today to improve your tomorrow!

Questions or comments: Mike@IMTcoaching.com

Want to book Mike to come out to your office for a private training and site visit that is sure to jump start the number of loans your office closes?  Visit:  http://www.imtcoaching.com/how-many-loans-do-you-want-to-close-in-2018.html