Counting down, or ramping it up?

A funny thing happens to the entire mortgage and real estate industry this time of year, people are either counting the days to the end of the year or they are beginning to ramp up their systems and activities to hit the new year running. Unfortunately, most are counting it down.

The “herd” mentality quickly becomes one that looks at the calendar and figures that it is now “too late” to get anything going that will close in 2012, and have resigned themselves to whatever numbers they have and are willing to wind down the year attending parties and thinking about how 2013 will be better for them.

Loan originators and Realtors® can really become supportive of each other in this “Counting Down” mentality and collectively help each other make excuses as to why making any type of strong effort is not worth the energy. One supports the other in working through the pipeline of current transactions and slowly depleting their inventories of opportunities fixed on the arbitrary deadline of December 31st and the end of 2012. How sad is that? An entire year of effort and momentum just allowed to, run itself out because of a completely arbitrary deadline?

This is only October and we already see holiday items in the stores and the notion that this year has just about ended. How can you say that with thirty to forty five days left in this year to still find new people and put together transactions that can still close in 2012. Why would so much of the industry just relax? I am not sure, but it does happen each year!

So let’s look at the other side of the coin, ramping things up now for a strong 2013 opening. In all my years in the business, I have never seen anyone start the year really strong and have a “bad year”. And while I have had people begin a year slowly and have good or even great years, many who start slow never recover. That said, what do we have to lose by charging into November and December as if  the last two months were paying double or even triple commission? How would you approach your job the next ten weeks if you were going to get paid two or three times the commission on every new generated transaction? I bet many of you would easily maintain your current efforts, and maybe even push a little harder than you would normally?

Now I know you aren’t going to get double or triple commissions on these new transactions, but just look at what I have to say and see if it makes any sense to you to just look hard at this logic.

1) Pushing hard when others are slowing down multiplies your efforts and magnifies your opportunities.

2) As the year winds down, there is a great urgency by those needing to put together a deal to build a team of those still actively engaged and therefore you have less competition for more serious opportunities.

3) As the clock winds down, those deals that close amplify the value and professionalism of those who get things done. Just like everyone remembers who takes the last shot at the buzzer to win the game, but nobody remembers who sank the first basket of the game! While the point value is the same, the last shot defines the hero!

4) In most things in life, it isn’t how you start, but how you finish that counts.

5) Even if all your efforts don’t produce transactions that close before the end of the year, you have a wealth of momentum headed into 2013. Are you not going to need money next year?

6) Setting a big goal for the last ten weeks of the year gives you a chance to “stress” your opportunity generation and follow-up systems so you can see what needs improvement or replacement. All of which is a good thing heading into the next year.

So what if my Realtor® friends set a goal to get ten new listings before the end of 2012 and ten new buyer opportunities before the year ended? And so what if they didn’t all close or you fell a little short of the goal, would getting five new listings and five new buyers be all that bad over the next ten weeks?

To my originator followers, could you find ten new referral relationships before the end of the year? Would talking to, and pulling credit on five new opportunities a week over the last ten weeks be all that bad or even all that difficult? I don’t think so. How would 2013 look to you with the addition of only five new referral partners? Could you live with only twenty-five new loan applications before this year was out?

It’s up to you. Are you ramping up for 2013, or are you just going to let the clock run out with nothing to show for it but the same old excuses that “nobody does any business at the end of the year?” Sixty-seven days left to “Do something today that improves your tomorrow!” It’s not how you start, but how you finish!

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172 Hours

We have all heard the phrase “time is money”. We have also heard people explain to us how “busy” they are. But rarely do we see people make the connection between the two. Being “busy” isn’t always being productive. In fact, many of the “busiest” people I come across don’t make a lot of money. They are constantly in motion, but they are not focused or consistent with almost no system, schedule, or accountability.

If we all concede for a moment that we all use a forty hour work week as a standard, and there are 4.3 weeks in the average month, that works out to about 172 hours each month to do what we do and earn what we earn.

Mortgage loans are a result of generating an opportunity and converting it into a closing. How do we measure up? How many combined hours do we work to close one loan? How many hours does it take for our “team” to close a loan? I have found, if we back the numbers out, it changes the vision of what we do and how long it takes. More importantly, when we start looking at a random group of loan originators, we can see huge differences in the time the process takes.

Example, if a loan originator is closing an average of five loans per month, they are consuming 34+ hours of their monthly time for each closed loan. Imagine that? I would venture to say that if you asked a dozen originators, how much time it took to generate a loan opportunity and get that opportunity through their system, none of them would say it took more than 34 hours to do. In fact, depending on most of my observations, the average time it takes to move a client from first contact to closing is about five hours. So if it takes five hours to do that part of the business, could it be that it takes the average loan originator twelve hours to generate a loan opportunity? Well, that can’t possibly be true because the average originator barely spends ten hours a week prospecting. That translates to about nine hours per closed transaction. Really; nine hours to generate the opportunity and five hours to close the loan still only comes down to a total of 14 hours. What happens to the other 102 hours per month? Ah, that must be where the “busy” comes in!

You see, when I track my best people. The ones that close ten to fifteen loans per month, by themselves, month after month, some very interesting patterns begin to appear. First, all of them take and submit outstanding loan packages. The less trailing documents, the less time spent on the file. Second, they double check everything before submission and include a specific cover letter explaining the transaction and attach it to the file. Third, all communication is documented in the file. Every call, email, or message is in the file for everyone to see. Fourth, they schedule their work time free of interruptions. They turn off the phone, ignore their email, and close their doors. They start and finish then schedule the next follow-up task. Last but not least, they do a real good job setting expectations up front. They get everyone on the same page and structure set communication times, establish due dates, and hold people accountable to that schedule. When things are set to a schedule, it is easy to keep on track.

Those “busy” loan originators, the ones scurrying around the office flailing papers, and whining about things, are the one’s losing time working on things that should have been done at the beginning. Taking a few extra minutes up front on a file will save you HOURS on the end of a deal!

Working smarter not harder is something many people talk about, but few people actually do. By looking at your time and activities as they relate to the number of loans you close will provide you with a valuable perspective. So here is the question: How many loans can you close in your 172 hours each month? If you don’t track that number, it will never improve! The best of the best close a loan about every nine hours. What if you are only half as good as the best of the best? Then you would be closing almost ten loans per month.

We all get the same 172 hours in a standard work month. What you do with that time and what the results are can vary widely. You need to seriously look at what you do and how long it takes before you can even attempt to improve. Once you do, productivity can grow exponentially!

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Fourth Quarter Business Assessment For Mortgage Bankers and Loan Originators

Something about today’s date just begged for a blog post about being more organized and on target. So in honor of 10-11-12, let’s do something today that really does improve our tomorrow.

All of us should be following our own written business plan. You can’t be working in your business if you never work on your business. A written business plan is critical for you to setting your goals and achieving them. For those of you who have never done a formal business plan, you can go to my website at the address below and buy the business planning ebook for $9.95.  If it has been a really bad year for you and you don’t have the money, just write me an email explaining your challenges and I will send it to you free.

If you have your business plan in writing, now is the time to take a few minutes and compare your goals with where you are now. With only one quarter of the year left, now needs to be the time you look at every task, relationship, and activity to see if they are providing the amount of business you had hoped for. If not, it is time to make adjustments.

Every referral partner on your list should have had a target number of referrals you had in mind for them. Check the numbers and see how close the projections are to reality. If you have Rachel Realtor in your plan for twelve referrals this year and you have only received five through September, you might be in trouble. Even worse, Rachel Realtor may be in trouble! By having a targeted number of referrals for each referral partner, you can keep track as to how well the relationship is living up to your expectations. Better or worse, you need to know.

You also need to track each area of marketing you are doing. Each should have had a target number of responses and you should be tracking to see if the response rate is better, worse, or at the projected levels. If it is worse, you need to find out why before you waste any more time and money on it.

Finally, we need to track the balance of your referrals. What percentage of your business is coming from which areas of “The Referral Triangle”, balance is important. Without proper leveraging of each partner and referral into the system, you are losing opportunities to generate more business for you and your partners; and value for everyone.

It shouldn’t take more than an hour to sit down and assess your situation. Doing it now can help drive home a great year, or save a year from not being all it could have been. You are in control of your actions and activities. You alone can make yourself aware of where you are in relationship to where you wanted or needed to be. You need to take the time to locate your position in order to determine if any corrections or adjustments need to be made so the year ends where it was supposed to be. Waiting until January to find out you didn’t reach your goals or potential in 2012 isn’t going to help you. You need to do it now while there is time to make any needed changes.

“Do something today that improves your tomorrow” is my company motto for a reason. You can’t do anything about the past except to learn from it. I am here to help you do just that.

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Fall Strategies for Mortgage Bankers and Loan Originators

Summer is over and we begin to transition from the lazy crazy days of summer into the final full season of the year. Of all the seasons, fall is the single most important time there is. We reap the harvest of all of our activities and begin to plan for the end of this year and the beginning of the next. Less than 90 days until 2013 finds us, and without a plan we are likely to miss out on a number of significant opportunities.

First thing we need to do is take a few minutes and compare our third quarter results to our business plan and see where we are ahead and behind on our projections for the year. Waiting until January to realize that you didn’t do as well as you would have liked is not an option. Waiting to get your W-2 form to see how you did will likely cost you thousands. You need to assess every referral partner, every business and referral source against your projections and be certain you are on target. If not, make some needed adjustments and get to work!

Fall allows us to start speaking about the year-end strategies. As we spoke about before, October is the last chance to file taxes for those with an extension. It is the very last chance you have to put together a deal for a short sale that can close before the next year and have any loan forgiveness not be taxed as income. October also opens the door to many community events and gatherings. Large numbers of final outdoor activities like football games, harvest festivals, hay rides, are great places to get in front of people and help in the spirit of community.

Don’t forget community volunteer efforts. Many public service organizations and nonprofit groups look for people to help raise money and do the work needed to support their efforts. Get involved, become engaged; select a place to become active and alive in an organization. Become a doer. Do the work. Become known as someone who does the action rather than someone wo talks about action. When you stand up and do, you stand out! Become the standout person in your favorite organization. Not just a figurehead, but someone that does the work that needs to be done to support the efforts of the others.

Halloween represents the last holiday before Thanksgiving and all the holidays of December and the end of the year. With an early Thanksgiving, and with Christmas and New Year’s falling on Tuesday’s this year, we will see a very early end of the “work year” by many people. You need to gather yourself and your goals, and have a final push setup for the last sixty days of the year, and nothing can help kick that off than a Halloween celebration. Think about starting or supporting an event where you can drive your friends, family, coworkers, referral partners, and your clients to enjoy themselves before the pressure of the year end celebrations begin.

Rent a farm and have a pumpkin pick. If you don’t live near a farm that grows pumpkins, contact a supplier and look into the cost of bringing in a truckload and make your own. Often you can band together with your referral partners and share the costs of such an event that includes games, face painting, contests for the children and some warm apple cider for everyone.

Organize neighborhood clean-ups for the elderly and disabled homeowners who could use some help raking leaves and securing their property before the winter. Many times you can work with nonprofit groups and even local schools to spread the word and find those in need and those willing to help.

In the fall, it is all about the people. No email. No ads. Just get out and meet the people. Just do the work and let that be enough. People will come to know you as more than just a mortgage professional. They will see you as a person that does the work and cares about others. Even if it doesn’t lead to a single transaction (that would be very unlikely) you would have positioned yourself as someone that cares enough about others to have stepped up, and got involved. Besides, you will feel better for having done so!

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