Okay, so everyone has already abandoned their business plan to chase refinances. I get it. I don’t agree with it but I get it. The lure of fast money can be very powerful. For those new to the industry it can be as simple as buying a list and pounding the phones. For more seasoned people it is just a matter of combing the database and finding targets that make financial sense to lower payments. I get it. But what happens often is the chase of the refinances becomes all-consuming and the daily prospecting all but goes away. Referral partners get frustrated because people are neck deep in refinances that they feel left out or neglected. And believe me, in the mortgage business, absence DOESN’T make the heart grow fonder; it causes relationships to dissolve and new relationships to be formed.
I am not suggesting that you don’t do refinances. What I am saying is, don’t abandon your prospecting plan. You can do all the refinances you want before 10am and after 3pm. Heck, work evenings and weekends if you want the EXTRA money, but remember, if you plan on being in the business for the long haul, grinding refinances is a tough way to make it happen.
One of the things I coach my people on that are working refinances is to be sure one of the first questions is: “Are you currently living in your Forever Home?” If they are, then just review all the options and provide choices so the client feels comfortable with their relationship with their house and their money. But if they aren’t, then you need to discuss the options. Do we look into an ARM? Do we think about listing and selling to go buy our Forever Home? We talk at great length about this in my “Forever Home Strategy®”. Use the same concepts to show and share the opportunities to your client with the help of their Realtor®, or your Realtor® referral partner. Nothing makes a Realtor® happier than someone bringing them a listing and two sales all in one call. So go back and read the strategy and be clear on how to execute the plan and convert these powerful opportunities.
You also need to be watching and tracking your numbers. You need to be tracking contacts, credit pulls, preapprovals, files submitted into processing, as well as your closed loans. You also need to be tracking your inbound leads and following where your business is coming from to keep your referral partners on the path to the number of referrals you expected from each source. Are you working the plan and are the results what they should be? I urge extreme caution when comparing numbers just year over year. Last year, 2013 was likely the worst first quarter all of us have seen, maybe the worse first quarter ever when it came to closed transactions. The weather in that first quarter was brutal and it hit our industry very hard. Consequently, first quarter sales and closed transaction numbers were pretty poor. So when the first numbers start coming in, please use extreme caution about how “good” they look compared to last year.
Another important tracking item is to monitor new listings, days on market, and total inventory. This time of the year, those numbers should be building. If listings are up but total inventory remains flat or is falling, you are in a hot seller’s market and days on market should be falling. If it grows faster than closed units and “days on market” starts to rise, you are in a more traditional winter market that is building toward the spring buying season. It is helpful to watch these numbers with your Realtor® referral partners to help track your individual market, or even subsets of that market.
Last but not least; you need to keep a close eye on contacts, credit pulls, credit quality, and preapprovals. Make sure they are growing and that the quality is good. Remember, the purchase market is much stronger in most markets and many people are unaware just how strong. It is also the life blood of our industry. Refinances are great and a service you need to provide, but purchase deals and putting people into their Forever Homes before prices and interest rates rise, is good for the client, good for your referral partners, and good for the long term health of the industry and your business.