“The Expert Gap”

Here we are, approaching the beginning of March and likely everyone we are going to close in the first quarter of the year is already in our pipeline or currently looking to make an offer. Staying in front of your numbers helps you keep your business in front of you and provides an opportunity to react and make changes in time to prevent the “valleys of production” often experienced in our business. I have always maintained that you can best improve overall performance by not focusing on the top part of your business, or growing your best month’s production; but rather by focusing on raising your lower months higher and allowing the top months to just happen as a result of doing the right things consistently. When you focus on your best month ever, it can often come at the expense of prior and following months, and cause a group of consecutive months to average out to a really weak total.

I try to keep my people focused on the “Expert Gap” at all times. Understanding that as loan professionals, we make a clear choice every day to either be an expert or a salesperson. Nothing wrong with being a salesperson, it just becomes a long term struggle to press that sales mentality out into the public when most people hate being sold! By focusing on becoming the local expert, you create a gap between you and your competition. This “Expert Gap” grows each day as those in your specific market come to understand the value in working with a true professional.

A clear representation of this “Expert Gap” comes now in the form of closing times on residential purchases as many in our industry struggle to close loans on a timely basis. Recently, Ellie Mae® has come out with a report that the average closing time on residential purchase mortgages has grown to 50 days on a conforming loan, and as much as 53 days on a VA loan. The self-fulfilling prophesy the industry has put out there since TRID came to us is that contracts needed to be 45 to 60 days to allow for the added work complying with TRID. As you well know, I have spent the last year and a half pushing my agenda that no such time frame was needed, and that all loan professionals had to do was get “BETTER” at their jobs by doing the work up-front with a client and preparing them and their referral partners on how to still close transactions in 30 days or less with TRID in place. I am happy to say, all around the country, originators who took this advice and got better and more professional, are seeing the benefits of “The Expert Gap”. Those professionals I am working with are averaging 22 days from receipt of contract to issuing the CD.

This is a significant difference that referral partners and customers are beginning to see. Even listing agents and sellers are starting to notice that a true full document pre-approval issued by a true loan professional that will close in 30 days or less, represents a significant value over those who can’t. And while some companies are spending millions of dollars advertising some sort of space loan that can be done in ten minutes; referral partners and customers are quickly finding out that a ten minute computer program can’t prepare a borrower with all of their options, and may even send people out into the market with a worthless piece of paper!

Local experts are now more important than ever. Speed in the pre-approval process is a lot like a fast surgeon; you don’t need it fast, you need it done correctly. The speed in the mortgage process can’t possibly happen at pre-approval. It can only come after and expert has examined all the information and discussed all the options before the customer begins the process. With a solid full document pre-approval done by a qualified local EXPERT, borrowers and the real estate professionals involved in a transaction can safely show property, accept offers, and schedule 30 day closings without fear of delays or worse, deals that die because the borrower was never really “Qualified” in the first place,

The “Expert Gap” is very real and growing each day. As I talk to my clients around the country, more and more of them are being invited to meet with realtors® and other referral partners they have never connected with in the past, or who were involved for the first time in a recent transaction, to come and share with them how their local expertise gets transactions to the table and closed, faster and with less hassle than other mortgage people. There is a growing demand for speed in the mortgage industry. But it’s not by going to space by providing a ten minute guess as to what the person might be able to do. Speed in the mortgage arena comes from a local professional doing a thorough job working with the customer in the very beginning to review all the information and helping that client make an informed choice! You can close loans very quickly when you do a great job of preparation. Experts invest their time upfront, so the total experience for the customer is better, with the speed coming from contract to closing!

Questions or comments: Mike@IMTcoaching.com or visit us online at http://imtcoaching.com

“Maximize Your Prospecting”

We all know we have to prospect on a regular basis. Some of us need to prospect more than others depending on how long you have been in the business and where your business comes from. Truth be told, it is important that everyone knows where their business comes from and is always focused on cultivating new opportunities by establishing or maintaining referral relationships and prospecting.

As we have discussed in the past, we are constantly working a balance between “Fishing & Farming”. Working a plan that generates both instant and long term results is essential. The key to this is being very clear as to what you are trying to accomplish. To do this, we need to follow three very basic steps:

  • Preparation. What is the goal? What is the plan of action? Who is my target? When do I do this work?
  • Performance. During the time of doing the actual work, am I clear of what my message is and am I providing value to the potential referral partner or client as I am asking for the opportunity?
  • Connection. After completing the work, have I connected all the information through social media making it simple for people to see and share?

A good example of this would be to take a page out of my “Coaches Playbook” and show you exactly how a day “running the Realtor® route” looks. A Realtor® route is simply seven to ten Realtors® in a similar geographical location that are placed in order from closest to furthest in a “route” format. Some people work the route from home to the office, or out and back from the office, or from the office to home, depending on the location and the objective. I prefer running the route from 10am to noon, but some people prefer the afternoon schedule better. In either case, it should not be more than a two hour time frame or it likely won’t get done!

Once I have established the “Realtor® Route”, we have to follow the steps. First step is Preparation. To prepare for the route we must have a physical piece of material we are going to deliver. A printed article, blog post, or any form of information that is printed. We take a copy of this information and place it in an envelope and put the Realtors® name on it. We do this for each agent on the route that we intend to visit. We place the envelopes in route order and begin to run our route.

The second step is Performance. We have to go out and do the work. We drive to the first stop on our route and go inside the office. Then:

  • We ask for the agent by name.
  • If the agent is there, we give them the envelope and share with them a brief description of what is inside and then ask if there is anyone they have been working with that you should be talking too?
  • If the agent is not there, which is most likely, leave the envelope with the receptionist and head back to your car. Once in your car, call the agent on the phone. If they answer or not, the message is the same. You tell them your name, and let them know that you just left something for them at their office. If they have any questions, they can just give you a call. You also ask them if they are working with anyone that you might be able to help.

The last step in running the route is Connecting the information you just delivered through your social media outlets. If nothing else, you must have a professional Facebook® page. You need to share the information on your page. Very simply post the information and be sure to mention the agents you left it for. Even if you are not “friends” or they haven’t “liked” your page, put it out there so it can be seen and shared.

You must remember to touch all the areas people are connecting.

  • Physical office visits help create schedule discipline and create opportunity to meet new people.
  • Physical handouts create a long term reminder of your visit and value.
  • The call from the car reinforces the visit with a personal connection.
  • The social media connection allows for the potential of easy sharing and the opportunity to reach people you don’t know yet.

If you follow these three simple steps, you will find your prospecting will yield higher quality relationships and referral opportunities.

Questions or comments: Mike@IMTcoaching.com or visit us online at http://imtcoaching.com

“Build Your Wave”

Welcome to the middle of February! Presidential caucuses and primaries are in full swing. The Super bowl is past us and we are preparing for Valentine’s Day. Strange to think that we are likely already engaged with the people who will close out the first quarter of the year for us! Yes, it is likely that anyone you are going to get closed and paid for by the end of the first quarter, you have already met and have been working with! It all gets on us so fast that you do have to be paying attention so things don’t slip away.

We really need to be paying attention to our business plan and how we are tracking. If you aren’t tracking your numbers, how will you know how things are going until it’s too late to do anything about it? Things we need to be tracking include:

  • Inbound referrals
  • Credit pulls
  • Pre-approvals issued
  • Pre-approvals active
  • Clients in contract
  • Closed units

Checking these items helps you track and make adjustments. If you are not tracking, you are just guessing. Don’t guess!

Inbound referrals and where they are coming from lets you stay on top of your prospecting and track actual referrals from your referral partners.

The number and quality of your credit pulls allows you to gauge not just quantity, but the quality of the referrals coming in.

Pre-approvals issued confirm your ability to convert the referral into a viable client.

Pre-approvals active give you an idea what the short to midterm transaction opportunities are.

Clients in contract tell you the likely thirty-day income stream.

Closed units confirm the process.

These numbers are important; especially when this time of the year most originators start the process of “Building the Wave”. I use this expression to describe the early season accumulation of clients beginning the home buying process. It’s like the water rushing toward the shore. As the water gets closer to the shore, the wave grows in height and strength. How far that wave will run up the beach is all a matter of the action behind it and if anything is in the path to interrupt its growth. I think of this part of the year for originators as the building of that wave. Originators accumulate referrals, referral partners, and opportunities. The people coming into the system are greater than the number of people completing the process. This helps create the “wave” of potential business. The bigger the wave, the more power it generates and the further up the beach it travels.

Much is the same for the origination cycle. Slow at first, January through March sees the number of new opportunities outpace the number of closed transactions as many are just entering the process. These early entries are likely the first in their social group to begin the home buying process. They are the “pioneers” of their group and are likely to be followed by others in the months to come. As spring rolls in, we find the pace quickens and more people engage the market. The wave grows much faster in speed and intensity. By the end of June or beginning of July, the wave hits the beach in a flood of closed transactions. How far up the beach that wave travels will be up to how well your systems work and how good a job you have done securing the relationships and commitments of those you have served in the months prior. The better you have done, the further the wave goes up the beach, and the more transaction you close!

The longer your credit pulls and pre-approvals outpace your closings, the better the closing volume you are likely to have for the year! So pay attention to your systems now and track the numbers regularly to be sure you are capturing every opportunity. Stay connected to your process and make sure that you focus on the quality of the experience, so that the quantity of opportunities come your way!

Questions or comments: Mike@IMTcoaching.com or visit us online at http://imtcoaching.com

“Follow-up to Convert!”

So many people ask about how to generate leads it is almost a full time job. People talk about building relationships with referral partners. They have dozens of ways of buying leads. The talk about lead generations while serious, is often so overpowering that people rarely see, and fewer discuss, the transactions that are lost because people don’t follow-up on an opportunity.

I find it shocking that most of the loan originators in this country have no idea what their pull through rate is from contact to closing. It’s even more amazing that most managers of originators don’t know, track, or even think to track this information! That would be the same as not tracking the batting average or on base percentage of a major league baseball player. Heck, they do a better job tracking performance statistics of a high school baseball team than most sales managers do tracking the performance of their loan originators.

What if we did? What if we knew? What if someone really made the choice to track the real numbers of their own performance so they could use this information to know what they need to improve on to close more loans?

Recently I worked with a branch and their manager to look seriously at the numbers. We actually began tracking some very basic information. The results were so incredible; we had to review everything we did to be sure the numbers were real. Some of the information was downright scary!

Since our business flows from one month to the next and one year to another, it is difficult to be exact in most things without tracking specific information over a long period of time, but what we did find was enough to make us want to follow-up further.

The first thing we saw was most originators have no idea what their numbers are! So let’s just say that their estimates were not even close to the reality. So far off, it’s not worth even going into it here. But the big take away was, it wasn’t that most originators didn’t get enough opportunities to do business, they just let much of what they did have drift away! They didn’t need more leads; they needed to stay connected to the business they already were in front of!

The biggest surprise was that the largest loss of opportunity comes from originators who never follow-up with their pre-approved borrowers! Can you imagine? You do all the work to talk to the client, run credit, collect documents, issue a pre-approval, then NOTHING! Just on to the next customer and hope the person you just spent all of the effort on calls you once they find a house. Is that really the way to run a business? Get 90% of the work completed and then sit back and hope the people find a house, get into contract, and then call you to put the package together? I don’t think so.

Now I know you all think that I have to be talking about some “other” people. I couldn’t be possibly talking about you! So here is a little test. If you aren’t already doing this, try tracking your own numbers. Try it just for a few months and really see what you discover. I guarantee you will find some very interesting numbers. Managers, do this for your office!

  • Track every credit pull and keep track of how many had good enough credit to qualify for a loan.
  • Of those good enough to qualify, how many pre-approvals did you issue?
  • Once you issued the pre-approval, how frequently did you check up with that borrower to see if they were viewing property?
  • Track how many of your pre-approvals found property and closed a loan with YOU!

When you start monitoring these numbers, you will certainly find room for improvement! If you don’t track the numbers, how can you make the proper adjustments to your system to improve your closing ratio? What would happen if you improved your contact to closing ratio by 10% – 20% or more?

Leads are an important part of our business, but conversion ratios tell the story about how well we process and profit from the leads we generate! In most cases we need to spend much less time trying to find or buy more leads; we need to a better job staying connected and closing the ones we already have!

Questions or comments: Mike@IMTcoaching.com or visit us online at http://imtcoaching.com