Setting Up The Season

Today is the last day of February and that leaves us just 31 days until the end of the first quarter of 2013. Seems like just yesterday we were talking about our plans for the coming year, and here we are, quickly approaching the end of the first quarter.

If we keep ourselves looking forward, we have the entire month of March to get out in front of our goals. We already know what we have closed in January and February, and we likely have a solid idea by now what we will close in March. So how does it look? Are we tracking as planned? The very reason we spend time writing a business plan is to use it as a guide for the entire year.

So based on our projections for 2013, how are we doing? Remember, we need to be tracking our business against our plan and the known percentages of our production, not just as a part of a static quarter. What I mean by that is, if we wanted to close 100 units for the year, a static quarter would be 25 units, one fourth of 100. However, our business isn’t static, it is cyclical. So by comparing the average percentages of our closed production month by month, we have a more complete picture of how our production really flows. I have one originator that closes 18% of his total business in the first quarter. So by that estimate, he should close 18 units in the first quarter if he was to be on target for 100 total closed units.

By using historical data to help you determine more accurate tracking methods, you will get more reliable information from which to make your choices. This also holds true with your referral partners. Some sources are much more consistent than others. Accountants tend to send you the most referrals in the first and third quarters of the year. Why; because that is when they are engaged the most with their clients. Realtors® tend to refer more business in the spring than they do the winter, insurance professionals and attorneys tend to be less seasonal. The key thing to remember is to track the numbers against your expectations so you can manage the relationship proactively instead of reactively.

So where do we need to be by March 31st to be on track or ahead of our goals? What do we have to do in March to be sure we are there? I know it sounds silly to be worrying about it now, but the time to make adjustments is when you have an opportunity to improve, not after it’s too late to do anything about it!

The next key thought about setting up the season is to share important information with those who are in a position to help you! Right now accountants and financial planners are meeting with clients discussing taxes and investments as they relate to the current year and new tax policy. If you aren’t reminding them to have their clients contact you to review their housing options and how to minimize the cost of where they live, you are doing a dis-service to your referral partners and their clients. As we have said before, many people would benefit from refinancing, trading up or down, or buying investment properties. How do they know all of their options if they haven’t talked to you about them?

Last but certainly not least are your Realtor® partners. We need to get engaged with them to help them take advantage of this buying season. Almost every mortgage professional on the street has heard more than one Realtor® acknowledge the lack of housing inventory. The National Association of Realtors® has said listing inventories are down about 30% year over year. While I feel the pain, I don’t see anyone proposing a solution? How about we get out into the neighborhoods with our Realtor® partners and go knock on some doors and talk to some people? Just because there is a lack of listed homes doesn’t mean there is a lack of inventory. Unless you live in Detroit where they are bulldozing down homes, the number of listing opportunities remains the same. In fact, I can make a case for the fact that there is even greater opportunity to list homes for sale than any time in the past few years because the market is better and interest rates are still quite low!

If you don’t ask for the business you won’t get it! Hundreds of people in your market would love to refinance or sell their current homes and buy a better one if someone would just tell them that they were supposed to do that NOW!

Home prices aren’t going lower. Interest rates are already off the bottom. Almost everyone agrees that both prices and rates will be higher sooner rather than later. What are you waiting for? Get out and get knocking! They aren’t going to call you!

How many transactions won’t happen this year that should have because you didn’t tell someone that they would benefit by doing something NOW???

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There Is No Lack Of Inventory!

Loan originators around the country have been sharing with me the concerns of their Realtor® partners about the current lack of inventory. While it is true that current home listings are down more than 30% year over year, there shouldn’t be any concern. Inventory is out there, you just have to go get it.

Listings won’t fall from the sky and likely most of them won’t call you on the phone. The one’s that do are just the tip of the iceberg. Many people who would have listed and sold their homes this year and gone on to buy another home won’t do so for one very simple reason; nobody told them they were supposed too! Just like we know that 43% of the current home owners in the country are in a position to refinance their current mortgages and save money each month and haven’t yet done so; there are thousands of home owners that would benefit from selling their current homes and buying a new one. They won’t, because you and your Realtor® partners haven’t told them they should!

While interest rates are up from their all-time lows, they are still very attractive and make for very affordable borrowing. In fact, many people could find themselves in a larger home in their same neighborhood for the same monthly payment they are making now! Simple math will show you just how beneficial making a move can be you just have to look at the numbers. If the math isn’t enough, look at need. Does the person who bought their home five or six years ago have different needs now than they did then? Would an extra bedroom or bathroom be a useful upgrade? How about moving closer to schools, work, transportation, or shopping?

It isn’t just about the financial side as much as it is awareness. People could save money by refinancing but haven’t. Maybe saving money every month isn’t attractive, but what about getting a better living situation? It is all about the awareness. Trust me, a married couple who bought their first home six years ago when their two daughters were five and seven thought their three bedroom one bath cape was the American dream. Now, right around 7am on a school day, it is a nightmare trying to get into that one bathroom! How much is a second or third bathroom worth? What if you could have it for the same monthly payment? Would you pay twenty or thirty dollars a month more for that benefit?
Off course you would! Most everyone would! The reason they live with the situation is because they don’t know the math behind making the move. That is where you and your Realtor® partner need to work together to share the information.

Why can’t you identify entire established neighborhoods of smaller homes and look for the likely trade up type of properties? See what those homes are currently selling for and do the simple math. Remember, you need to do the math on the smaller homes based on values and interest rates from when they bought the home first. The reason is simple, interest rates were much higher and the real savings will come from financing more money with lower interest rates that create a smaller monthly payment or a slightly larger payment for a much bigger and better property. Depending on your market and the time in history your potential seller/buyer bought, you might even have enough equity to eliminate PMI and further stretch that monthly payment.

The point here is we need to get out and talk to people! If people are not aware of their options, it makes it difficult for them to pick a better way. The mass media has told people how terrible the housing market is. They have gone on and on about how it is impossible to get a loan. The seemingly endless chatter about how poor the economy is and how it seems like everyone is going to lose their job. Well, we know these are all serious concerns, but not true for most people. Most people have jobs, equity, and good credit. Most of the people who own a home today could sell and buy another one. Some of those people could buy a bigger or better one for the same monthly payment as they are paying now, or maybe just a few dollars more, and would gladly do so if someone shared with them this opportunity.

Now is the time to get up, get out, and talk to people! You have to do the WORK! The next great listing is next door, across the street, or down the block from the last great listing. You just have to get out and share the information with the people! If you and your Realtor® partners don’t share the word, they won’t list. If they don’t list, they won’t sell. If they don’t sell, they don’t buy the next home.

Every day you delay is one less loan you get to write and two less commission checks for your Realtor® partners. Inventory is exactly where it always has been, right outside your door! You need a plan, you need to schedule, and you need to go do the work!

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Valentine’s Day – Are You Feeling The Love?

Valentine’s Day can mean many things to many people. For example, it means my wife MJ and I will be in Las Vegas celebrating our anniversary. We were married here and go back every year to spend a week enjoying shows, great restaurants, and of course, all kinds of games of chance. If you take the time and plan it out, Las Vegas can be a great bargain for entertainment, shopping, fine dining, and a wonderful experience. Heck, you can even make some money once in a while, but that is a happy by-product of enjoying all the other things Las Vegas has to offer.

Just like the mortgage business, Las Vegas can offer huge rewards for those with a plan and proper expectations. If you have a clear understanding of what success means, it is really simple to follow your plan and reach your goals, providing you set the proper expectations.

So what do I mean by this? Simply put, Las Vegas is a place to go to be entertained, not make money. The odds of being a successful gambler are stacked against you. All the knowledge in the world about any of the games can be simply cast away by the fall of a card, roll of the dice, or spin of a wheel. Anytime there is a totally random outcome to anything, the house takes the odds and can out last almost anyone at any time. Many more people go broke gambling than casino’s do. Knowing the math and having huge assets allow a casino to ride out random events far more than that of a single gambler. While some may strike it rich, many others fall.

However, if you look at Las Vegas as a place to be entertained, you can realize great value, because the odds are in your favor. How so? Just knowing the odds and calculating the dollar per hour entertainment factor. If my wife and I go to Las Vegas for a week and see a show or have a fine dinner each night, you would expect to pay between $200 and $500 for about two hours of entertainment. If you plan your gambling like your entertainment, follow basic strategies, you can manage to gamble for the same price as your other entertainments, and allow your comps to build and have the casino pick up the tab for your room and maybe some shows and a few meals. If you are really lucky, you might even win some money!

So what does this have to do with the mortgage industry? From a sales stand point, you must calculate your prospecting time to generate the income you need at your hourly rate needed to make the money to support your family. If you don’t track the amount of time spent prospecting, as well as the returns you get for having prospected, how will you know if it was worth the effort or that you may have been better off doing something different.

Some originators just work and hope. They do what they think they should be doing, but never take the time to see if what they are doing is generating the return they need. Just like Las Vegas, you need to know the odds and have a simple strategy to succeed. The casino will award players comps based on the amount bet over the time played. They don’t look to see if you win or lose, quite frankly, they don’t care. They know the house edge on each game and react accordingly. They know they can charge $1,000 a night for a great suite, but it doesn’t cost them that. If they choose to comp a room so that I choose their casino over another one, they are happy to do so, as long as they monitor the hours I spend at the tables.

You need to do the same. Know the odds. If you have a 40 hour work week, you have about 172 hours each month to generate your money. Weather you do five loans or twenty five loans you spend the same 172 hours. It’s what you do in those hours that can make all the difference. You and sit by your phone and hope it rings, or you can go out and talk to people. If you go out and talk to people, what you say and whom you say it to can turn your time into a big winner.

Just like the games in Vegas, what you do to prospect will have different odds of success. You must determine what you are willing to do, how long it takes, and what the returns are to see that you make the most of your 172 hours!

There is no guarantee of winning in Las Vegas, just like there is no guarantee of getting a loan. You must understand the odds and determine your strategy. Just like I can guarantee that I will be entertained at a certain price per hour when I go to Las Vegas, I can guarantee that if you track your efforts and results, you can get the result you want, closing more loans! When you talk to more people, you close more loans. What can you do so that you are talking to more people?

Have a Happy Valentine’s Day!


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Working with Accountants & Financial Planners

Many mortgage professionals miss a key referral opportunity by not engaging with accountants and financial planners. These two potential referral partners are a key source of opportunity and often overlooked, or under-utilized.

Since this particular year is getting off to a late start due to last minute changes in the tax code and the government’s ability to fund tax refunds, it is not too late to engage these professionals and help provide all of your clients with a great deal of additional value.

Accountants and financial planners often communicate with their clients at the very beginning of the year to prepare them for tax season. Often, now is the time where last minute contributions to retirement plans, decisions on withholding rates, and a wide variety of other financial questions and preparations are taking place.

This is the time you want to help your accountants and financial planners provide additional value to their clients, and at the same time, provide them with an opportunity to locate new clients. So how do we do this? Simple; we share the benefits of your “Annual Mortgage Fitness Check-up and Identity Theft Screening” for their customers. This can often identify people who should be refinancing to lower their payments, rates, or terms. Given that we know from last week’s post that 43% of those who are paying a mortgage on their primary residence are likely to benefit from refinancing, that would likely be a large percentage of that accountant’s or financial planner’s clients.

Every week I ask my clients about the highest interest rate they have seen that prior week. And just about every week we find people still in 5 and 6% loans. Last week, we found someone who was 12 years into a 30-year mortgage at 9.25%! That L/O was able to refinance that client into a 10-year loan, save them $40 a month in payments and an additional $130,314 over the life of the loan! Now clearly it isn’t every day that this will happen. But with 43% of the people in loans over 4% interest you are likely to save a number of people enough money to offset their recent tax increases!

I have one group of originators in California working hard to get the message out so their clients, and those of their other referral partners, can offset the changes to both their state and federal tax situation. Now granted, not everyone is in a position to save money, but enough are to really have an impact.

The other points you can make to these professionals are the importance of the “Forever Home Strategies”. Prices are rising and interest rates are off the bottom. For those clients not already living where they are going to end up; now is the time to really look at moving. For those who have cash or cash flow, investing in that larger home or that prime location can be a great idea given that you can still finance money very cheaply, and homes are becoming a good investment again.

Your accountants can see how much interest their clients are paying. They can also see if those loans are interest only or maybe an ARM product. Isn’t now the time to have that conversation? If they are staying, refinance into a low fixed rate before they go higher. If they aren’t planning on staying, let’s find them that forever home NOW!

Financial planners can benefit because if people hadn’t planned for retirement but would really like to get moving on this, a simple kick-start could be lowering monthly payments to provide for cash to invest for that retirement. Maybe even both?

Accountants and financial planners are a great source of opportunity and value for mortgage professionals. Part of my coaching and training of top professionals include serious attention to these two import areas of business. Don’t overlook an opportunity to grow your business and increase the number of loan opportunities you can find by working to provide value for them and your clients by partnering with these two financial allies!

For questions and comments, please go to our website: or email me at