“Activities over time equal outcome”

Sometimes people fail because they don’t know what they should do.

Sometimes people fail because they won’t do what they know they should do.

Sometimes people fail because they stop doing what they are doing before they get the result.

In my professional career I know these three things to be true. I have seen it thousands of times all across the country. I have these listed in the order in which most originators will tell you they aren’t achieving the numbers they would like to be reaching. I am not convinced that they are correct.

People will accept poor performance rather than be fully committed to excellence. I know this because most originators don’t have a clear vision of what excellence is!

So this week I wanted to start an ongoing conversation about what an excellent experience is, how it’s delivered, and what that experience is worth to a customer. You see, if your business is fully automated, electronic, impersonal, and focused on lead to commission; you are going to have to prepare for increased competition and lower margins. In other words, many more deals for far less money. You will be replaced by technology and someone in a call center who will work cheaper than you will.

We are granted an opportunity now in our market to see a number of conditions all coming together that will become a significant turning point in our industry. The weaker originators who live on high commissions and low volume are soon to be a thing of the past. The internet and automation will make them extinct in a few short years. In my estimation, by 2020 the almost 70% of the loan originators in this country that close less than four units a month will either be gone, or working as an assistant for someone running a larger team of people, or in a call center.

Those originators who have built or are building relationships with all kinds of people and providing value to those people will be the ones that lead the teams and make the money. The cautionary tale here is that if you fail to manage the relationship, provide exceptional ongoing value to your people, and make the mortgage process as seamless and swift as possible, you may find yourself on the outside looking in!

I am not trying to put anyone in fear of loss. I am trying to share with you now an opportunity to gain. Look at our industry and see what is going on. Understand that the best will survive at the expense of the weak. Just like in nature, you adapt, evolve, or you die! I want to share with you how to adapt and evolve because those who wish to ignore the present will have no future. It’s your activities over time that generates your outcome! You have to know what to do, commit to doing what you should do and keep driving the process long enough to succeed, or know why you didn’t.

Prepare for the next generation of loan origination. Lead generation is not going to be enough. Building and maintaining relationships with exception value and a great consumer experience will be the benchmark for those that will be the next generation of loan professionals! Are you ready? Do you have your plan?

Questions or comments: Mike@IMTcoaching.com

Check out my site at http://imtcoaching.com for more information and helpful programs for your Loan Origination business.

“Power Preapprovals”

Everyone in our industry deals with preapprovals. We all know that all preapprovals are NOT the same! The range of tasks completed an information reviewed is vast, yet everybody uses the same words. So how do you create POWER in your preapproval? How does what you do make your borrower look better than any other borrower? What makes your borrower’s offer BETTER?

First, you must be able to articulate what you do and how you have done it. If you don’t, you haven’t created any differentiation. So explain your preapproval process clearly.

Second, once you are clear as to why your preapproval is better than your competition because of the work you have done, share with the BUYER’S Agent how by having your preapproval it makes this client’s offer stronger than other offers.

Third, create the tools to help the borrower and their agent share the POWER of that preapproval with the Listing Agent and their SELLER! If your message isn’t delivered, it doesn’t matter how good a job you have done!

So how do we do all of this and make sure the message is conveyed properly? USE VIDEO! Yes, a short video of 30 to 60 seconds explaining YOUR preapproval process and WHY this process is different from other preapprovals helps set you apart!

You know many online lenders don’t do what you do. Many out of state lenders don know the market like you do. Many call center lenders can’t close as quickly as you do. All of these are powerful tools that make your client a better buyer and their offer stronger than other buyers who haven’t gone through your process!

Also, think about doing an individual video for each pre-approval in support of that specific client! How much more committed can you get than that, personally standing up for your buyer and your process? This takes the standard preapproval and helps push it into a Power Preapproval”!

Sometimes it’s just one small thing that makes a big difference. Sometimes the details, the tiniest of details, can win the day for you, your referral partner, and most importantly, the client!

What makes you different?

What makes your process better?

What makes your client a stronger buyer?

When you give those answers in a different way, you create the space between you and everyone else. So why not make your preapproval more powerful by sharing all of these answers and using a format that will get you noticed!

“Power Preapprovals” something you can do today that will help improve your tomorrow!

For other strategies that will help grow your business, take advantage of our spring “Access” special that you can see on the website: www.IMTcoaching.com

Questions or comments: Mike@IMTcoaching.com

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“Preparing for a realtor office meeting”

I always enjoyed a great deal of success scheduling and executing speaking at real estate offices. Finding opportunities to speak at these events can be particularly beneficial establishing realtor referral partner relationships if handled properly. It can also be easier than you think to come across these opportunities. Here are a few helpful hints.

Always be asking! You get 100% of what you don’t ask for! As long as you are out making visits to offices and open houses, just ask the agents you are meeting to introduce you to their broker or reach out to the broker directly with your specific value proposition.

Why you? What about doing business with you makes their life better? How do you improve their customer experience?

Do your homework! Always do your homework before asking the question or seeking an invitation.

  • Do they have an in-house lender?
  • What kind of property do they sell?
  • Specific neighborhoods or possible programs?

When you get an opportunity, prepare! Be sure you ask the broker what issues they would like you to cover. Ask if there have been specific challenges in the market or with lenders. The old salesman’s creed “Ask the customer what they want and then give it to them!” comes to mind. Never think you know better than the broker!

Be short, be accurate, be generic, and be positive! Having been given what the broker wants you to address, share with them how working with you becomes the solution to the challenges put forward.

Share solutions in all forms of media! Sometimes their challenges are best served with a few passages from a book you have read. Have a copy of that book handy and highlight the specific sections that relate to the points you are making! But be careful, not everyone reads! Sometimes the use of an “audio book” or you recording a video explaining that particular section will be more helpful. Be sure you do all of these and leave them with the broker for their library!

Recording these videos is a great way to expand your YouTube® channel or your own website content! Being a resource and an expert is your job! It’s what will keep you burning those brain cells long after the meeting is over!

Leave time for questions! People will sometimes challenge you or ask questions that are too specific for the group to deal with. If you don’t have the ability to answer the question in 30 seconds or less, simply ask them to stay after the meeting or just schedule a specific time to meet with them to provide the detailed answer they want without consuming all of your time!

Follow up – follow up – follow up! Too many originators fail to follow up an office meeting with an offer to serve! Be sure you have collected cards from everyone attending and get a roster of all the agents so you can electronically share your message with those who couldn’t make the meeting. It may take a few months of weekly personal follow up to get a referral. So what? It’s only one phone call a week to try and build a relationship!

Hopefully this will help you master the realtor office meeting. I know I have always enjoyed doing them. For those of you who may be a little nervous about doing meetings; just relax and prepare yourself, you will do fine. If you aren’t convinced, then prepare for your meeting buy sharing the steps with a coworker or your manager so you get comfortable with the material.

Questions or comments: Mike@IMTcoaching.com

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“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

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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.

“Comes in like a Lion!”

Welcome to March, last month of the first quarter. You already have a great idea how your first quarter is going to close out, and how you are tracking your targets of your business plan. You certainly have a really strong idea of your closed units and volume, are we ahead, behind, tracking on course? All questions you need to be aware of! Go back and review your business plan and be sure you are in control of your business.

The old adage “March comes in like a lion and goes out like a lamb” is in reference to the weather. The cold winter begins to transition into the spring, where things are more comfortable and enjoyable. That reminds me a little bit of our entire client process. When we are first contacted by a new client, there is a flurry of activity that drives us to the pre-approval. Once the client becomes pre-approved, it almost seems like most originators relax and become almost too comfortable with the fact that this client will find a house and use them for the financing.

The problem is, that many of the clients that loan officers pre-approve, gone on to close loans with other lenders! In fact, I have seen as much as 30% to 50% of some originator’s pre-approvals actually close with other lenders! Just think of that! An originator does all the work of pre-approving the client, only to not close the deal? At these numbers, how does that loss of business change their lives? Not only in lost income, but in lost referrals and referral partners? The true costs can be staggering!

I have spent some time actually working with managers calling people who were pre-approved but didn’t close with their originator. The results were pretty interesting. While some people wouldn’t tell us if they indeed actually closed a deal, those that would share with us the information had a pretty common response: “I didn’t think it mattered who I used?” and “I just used the lender the Realtor® said I should use” was the most common answers.

So imagine what would happen to those numbers if we kept personally connected to our pre-approvals AND our referral partners to be sure the client knew that it does matter who they use? The lesson is, you can’t stop communicating with your client once you have them pre-approved, there is too much to lose not to stay connected! And by connected I mean personally connected, not just a series of boiler plate emails from a CRM, but real live personal contact! It’s certainly within your ability to call each one of your pre-approvals by phone every Thursday to ask if they have been looking at property or if they are scheduled to see property in the coming weekend.

Since my average client has between 20 and 30 pre-approvals out looking at any one time, larger teams have team transaction coordinators making those calls, but those calls take less than an hour to make. One hour a week of effort to secure the people you lose to indifference? Is it worth the time? You bet it is. In fact, when managers and originators track their losses and follow-up regularly with their pre-approvals, we have seen dramatic reductions in those people who close with other lenders or use a different Realtor® than the one they were using! Imagine that? More closed units for you, and more returned transactions to the agent you work with because YOU stayed committed to keeping connected?

As we head toward spring you need to stay on top of your numbers. You also need to track the way in which you keep connected to your pre-approvals. You can spend a great deal of time and money to attract opportunity, only to lose it because you didn’t keep connected. So be a LION through the entire process. Protect your pre-approvals right through the entire process and beyond! Managers, track your originators and follow their numbers. You may be very surprised at what you find!

Tracking your numbers, something that you can do today that helps improve your tomorrow!

Questions or comments: Mike@IMTcoaching.com

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“Rates, rate locks, and speed!”

We had a conversation about the rising interest rate market and how to educate and inform your clients and referral partners. Many of you have taken the information and done a great job sharing and informing. You will see that in the long run, it pays to be a resource and a trusted advisor when it comes to important information.

One of the strategies I have been sharing with my clients is on how to position what you do and how you do it as a system of value! We often talk about rates as if they were static. They are not. We also talk about rates as if they were all the same, they are not. We also have to combat the price shopper who saw a rate on the internet that is either, old, non-existent, not a product they are eligible to use, or a just plain LIE!

We need to have perspective and share one of my favorite sayings: “The rate isn’t great if the closing is late!” or, “There is no great rate on a loan you can’t close!” Either way, information is the only path. So a simple solution is to educate on speed. Why is speed important? Because it gives you options, leverage, and negotiating power! It can also save your client money!

I have long advocated doing a full document pre-approval on all clients before they begin the process so they are as strong a potential buyer as can be. Sometimes your client or your referral partner can get an offer accepted over others, just on the strength of the pre-approval! It happens on a regular basis for many of my clients that their offer was accepted even though it wasn’t the highest offer, but the surest offer!

In addition to that leverage, we also can share the benefit of speed to both the buyer and the seller. Looking at some rates sheets from various markets, we have a very real cost in the term of a rate lock. Originators and managers are very aware of the cost of these rate locks, but do we share this information with our clients and referral partners? But what if we did? What if there was a way to show that speed can save everyone money? The answer lies within the cost of time! In our case, the days we need to lock the loan in time to close!

We always have to balance the rate on the yield curve to the cost and to the amount of time you need that rate locked for! There can be a wide range of pricing in the same rate over different time frames. Generally, the longer you need to hold the rate and cost, the more expensive it can be. In today’s volatile market, awareness is really important. The cost of time is real. Your ability to close quickly can save your client, and even the seller real money on their loan pricing!

So work with your clients and their Realtors® to share the importance of time! Clearly your market conditions and terms of the transaction have a great deal to do with how quickly you can close! Inspections, Appraisals, Title, HOA documents and approvals, and other factors are all part of the equation, but nailing down to how quickly YOU can get your process completed can clearly set you apart from your competition!

Using the “Rate lock strategy” is something you can do today that will improve your tomorrow!

Questions or comments: Mike@IMTcoaching.com

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