Coaching has to be a passion. You can’t possibly help bring out the best in the people you work with if you are not passionate about helping people find results. I have spent the better part of the last fifteen years working with and coaching some of the best originators in the industry. I have also had the great fortune to know and learn from those in the mortgage industry, as well as some of the best sales and service minds of our lifetime. When you combine that with what I have read in biographies of some of the great leaders of the world, in sports, business, and military, you get to formulate the process by which you hope to help the people you work with reach their goals and beyond.
Most of the answers can be found in simplicity. Every time you think you have broken a process down as far as you can go, go back and break it down again! The path to success is not paved by making things easy; it is built upon simplicity and fundamentals that are simple to explain and duplicate. Nothing about the mortgage business is easy. However, it can be made incredibly simple. In the weeks and months to come, I am going to put forward some of the very steps I use with each one of my private clients to quickly understand what part of their business needs the most attention, and how we take a few simple steps to see immediate results. I have found that if you can quickly make a few simple changes that generate specific measurable results, people will be more open to future change, and maybe even embrace the changes they need to make to move forward. So here is the first step.
Simple measurable items to track your pull-through rates:
Each and every one of us does some form of prospecting. Whatever that is, it is the first step in the process that goes from contact to closing. In this piece we are not going to worry about how you generate that initial contact, we are going to focus on the math from contact to closing so you can have something to compare your number to. We have talked in the past about the various stages of the business:
• Suspect
• Prospect
• Applicant
• Closed Client
In the purchase-focused arena, we must modify our outlook and tracking to put specific numbers and conversion rates on the steps from contact to closing that look like this:
• Conversation to Credit Review
• Credit Review to Pre-approval
• Pre-approval to Formal Submission
• Formal Submission to Closed Loan
I use this like a baseball diamond, first base, second base, third base, and home. You have to hit all the bases to score a run! Just like in baseball, there are different statistics you can use to track these numbers, and some “players” have different levels of success. Here are the measurable I like to use, not because they are perfect, but because they show you clearly what part of your business needs immediate attention and will likely give you the biggest “return” for time spent working in that area. I call this the 80-80-80-95 rule.
80% of the people you have a mortgage conversation about should allow you to pull credit and have a credit score high enough to credit qualify for a loan.
80% of those people should supply you with enough documentation so you can pre-approve them for a loan.
80% of your pre-approvals should find a property and go into formal application.
95% of all formal applications should close.
If you follow the math, that means your prospecting and follow through should convert slightly less than 50% (48.64%) of the people that call you into closed clients. This is a starting point. I have some clients that are higher, and many that are lower. But the goal here is to track your numbers so you can see where you need to focus your efforts. It’s not always the case that you need more “leads”. You might be getting plenty of leads that either just are not credit worthy, or you are not doing a good enough job moving through the system, or just staying in touch with.
If less than 80% of the people you are talking to don’t have high enough credit scores to qualify, stop and see why! The national average credit score is above 700 and about 80% of the general population has credit score above 650. So watch where you are looking to see if you can improve.
If less than 80% of those who are credit qualified will not give you documentation so you can accurately pre-approve them, you need to look at how you are handling that process, and see what you can do to improve that number.
If less than 80% of your pre-approvals are not finding a property and submitting a formal application with contract, you need to look at how you are following up with them to be sure they are seeing property and reminding them that you are there to help them through the process.
If less than 95% of your formal applications are not closing, you really need to look at your systems and see why!
These are four simple steps with four simple items to measure to see how you are doing. Many people don’t know to track these items; others spend too much time looking for perfection instead of being sure that all of their numbers fall within an acceptable range. We can all pretty much agree that an almost 50% conversation to closing ratio would be a great start!
Questions or comments please contact me at: Mike@IMTcoaching.com or visit my website at hhtp://improvemytomorrowcoaching.com
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