“Business Planning for 2019”

It’s the end of September and we are quickly heading toward the end of another year. Many in our industry are winding down their busy schedules and looking forward to a slower pace while others are looking at these last ten weeks as an opportunity to do better for this year and next.

For the last 20+ years October has been “Business Planning Month”; a time of the year to look back at the prior year and prepare for the coming year. I make sure I do this because I want to have time to analyze, review, inspect, implement, and schedule the things that have to be blended into the business for the coming year.

We have all heard the famous quote: “those who fail to plan, plan to fail”, but it’s not just good enough to plan, it’s important to have a well thought out and disciplined plan ready and rehearsed by the time January arrives!

Our industry is facing challenges on multiple fronts. Pricing issues, technology issues, compensation, education, staffing, social media, data basing, and many more are all in need of attention. We also are being invaded by those companies who think that most of the people can be replaced by an algorithm and then handed off to a much less experienced or qualified professional.

Are you prepared for Zillow real estate and mortgage?

Does the idea of “Rocket Real Estate” cause you concern?

Will the Amazon one step $1,000 total transaction have you up at night?

What will you do to keep yourself seen as a vital member of an exceptional real estate experience?

If you haven’t thought about these issues, or if you have and aren’t clear as to the path to follow, it’s important for you to at least take part in “Business Planning 2019” process.

We make it simple for you to take part in the process. Mortgage Companies and their real estate referral partners can participate in a live one day event at your location for as many people as you wish to attend; both originators and their realtor referral partners are welcome. What you get:

  • We work from 9am to 4pm at your location
  • Every attendee gets “Access” to all the tools on the website and personal coaching assistance for 90 days via email.
  • Managers get a weekly follow-up coaching call for ten weeks
  • Three monthly group calls live with the coach to answer questions and provide guidance.

All participants will have an opportunity to enroll in private coaching or continue with their “ACCESS” for discounted rates should they desire ongoing support.

Managers, this is a golden opportunity to help your sales team and your realtor referral partners work together in using real life strategies that provide real opportunities!

If you have issues with:

  • Opportunity generation
  • Social media
  • Use of video
  • The power of data basing
  • Time management
  • Effective communication
  • Compliance
  • Rate shoppers

Zillow, Quicken, and others trying to put you out of business, are you going to sit back and let them do it?

Limited number of events and dates are available, for more information, please email me: Mike@IMTcoaching.com

“Just think a minute”

A few things to think about this week that caught my attention; either the entire world is trying to sell you solutions to problems that have been invented, or making excuses for why people don’t perform their fundamental functions.

Realtor income is down year over year and some would have you believe it’s an inventory problem. Yup, a lack of inventory is the reason. Lack of inventory; gee, why could there be a lack of inventory? Is it because all the homes have vanished, or is it because agents aren’t out on the streets making the case for why now is the time to move into forever homes?

Seriously, realtors have two jobs, list property for sale and sell listed properties. If there is a lack of listed properties to sell, why aren’t more agents becoming Listing Agents instead of all the new “TEAMS” of buyer’s agents handling leads lists? Could it be that the industry has converted too many agents and too many hours focusing on chasing leads lists that they forgot to get out on the street and actually go list property?

I also think another fun thing to look at is the topic of call reluctance. You know call reluctance is just a term for procrastination or success avoidance don’t you? Seriously, why would anyone be reluctant to make a call? Only two things can happen, you get what you want, which is good; or you don’t, which is exactly what you had before you made the call? So why not just make the call? And for those of you using sly dial, you know you are just making an excuse for not personally connecting with your people right?

And while we are on the subject of making calls, here is a story from one of my clients in Arizona. He was making annual connecting calls with his past clients when something happened that I have never seen or heard of in my 35+ years in the business. He called a past female client that he had closed a loan for a couple of years earlier. He was just checking in to see how things were going when a male voice answered the phone. It was a bit of a surprise to my L/O as the young lady he did the loan for was single when he did the loan, but anything is possible! So he asked for the young lady by name.

The man who answered the phone didn’t know the person he was looking for so he just asked if he had dialed the correct number. As it turns out, it was indeed the right number but not now the number of his former client. The L/O identified himself and his occupation, then went on to say that the lady he was looking for was a past client he was following up with that he had done a loan for in the past.

Just when the originator thought the call was about to end, the man on the other end said, “Are you really in the mortgage business? I have been renting a long time and my lease is about up for renewal and was thinking about buying a home, is that something you might be able to help me with?” Clearly surprised, the originator said he could and the two began to talk about what the process would look like and what information needed to be assembled to move forward. The new prospect made an appointment to come in and meet the L/O, he wanted to meet not complete an online application, and they met the next afternoon. Turns out, that the prospect was very capable of purchasing something that would suit him well, but needed a recommendation of a Realtor to go and see properties with! That is special!

One follow-up phone call, one lost contact, one new prospect, one new referral, and the ability to complete the purchase cycle. Just by being complete in following through with his process, what would have been a simple wrong number turned into a special opportunity! Yes, you just can’t make this stuff up!

So think about all you hear and the reasons people are giving for not succeeding. You may very well need new systems or tools or processes; but you may just need to go back and do the basic fundamental tasks that help keep the person in the profession! Just think about it for a minute. What is the work I am avoiding and why am I avoiding it?

Questions or comments: Mike@IMTcoaching.com

“Huge Weekend Opportunity”

Happy July 5th! With a big holiday on a Wednesday, it isn’t uncommon for people to stretch it out into the weekend. That said, this opens the door for a great deal of real estate activity. Here are a few steps to take in order to maximize your opportunities this weekend!

  • Get out and be visible!
  • Leave documented material at offices!
  • Tell those that are there that you are available to help them if their regular person is unavailable to serve your people!
  • Call from the parking lots before you leave!
  • Get to as many Open Houses as you can!

Many people are off or are taking off, that goes for realtors and mortgage people as well. Get out and get in front of your market, let them know you are working!

Have something in writing in an envelope with each agents name on it to leave at their office so there is something physical for you to direct them too! Talk about the back to school count down and how many days there are left for you to accept a loan application and close before the kids go back to school!

I expect that most of the agents you are trying to get in front of won’t be in the office; it doesn’t matter. It only matters that you were in the office, had some information about an opportunity strategy in an envelope, with their name on it, so you can leave it for them to pick up later! It’s also important that the few other people in the office see that you were there! Let them know you can help them too should they be ready to look or move to make an offer on a property!

Calling from the parking lot before you go to your next stop is critical! Making that call and talking to that person to let them know you were at their office is a really big deal. Even if you get voice mail, leave a nice message about missing them and that you are available should they need you.

Last but not least is to hit every open house you can find and follow through with the open house strategy! Talk to everyone! Pick a key feature of the house or the property so you can write a note to the seller applying for the job of being their next loan officer or to offer a second opinion on their next transaction!

This weekend is a huge opportunity to make new relationships, solidify old relationships, and to generate a few opportunities to do a few deals you never would have seen if you just sat home!

Get up, get out, and connect!

Questions or comments: Mike@IMTcoaching.com

“Mid-year Check-up”

We began this conversation last week and I wanted to follow up with some of the comments and feedback I got from that post. Many of you had no issues with going back to the business plan and reviewing the numbers, but there were a few questions about “gestation period” and I wanted to address it quickly. When I talk about the gestation period of you loans, I am referring to the period of time from pre-approval to contract, or pre-approval to closing. Either one gives you an idea of the time consumed by the process, and gives you an idea of how many pre-approvals you need in your queue at any given time so you are going to close the number of loans you project to close. Example: If you want to close 8 loans a month, and your gestation period is 90 days, you will need to keep 24 active pre-approvals or more in your queue. If your gestation period is 120 days, you will need to keep 32. Keeping track is critical. You can read more about this in the May 17, 2018 blog post.

I was happy to see a significant number of you who are tracking at or ahead of your targets! Great job, and keep doing what you are doing because it is working! However, there were a few of you who wrote to say that you were behind the numbers and asked for some help getting caught up. So here are a few simple steps to getting back on the numbers.

  • Review your numbers every week! Visits, contact, credit pulls, pre-approvals, contracts, and additions to the database.
  • Drill down on your schedule. Are you prospecting a minimum of two hours every day following your business plan?
  • Who and what are not living up to your projections and find out why? Correct it, complete it, repeat it, or delete it!
  • Check the math. Your ratios from contact to closing may be off and need to be recalculated.
  • Why not Wednesday! Pick something out of the “Coaches Playbook” and do it on Wednesday. Take two hours and implement one new strategy you haven’t used and see what happens. Be committed to working the plan for at least eight to twelve weeks!
  • Review all your pre-approvals you have issued this year and see where they all are. You might have lost track of them, or they might have lost track of you. Some might just be sitting on the sidelines waiting for rates to go back to 3%! Share the cost of waiting with them. Buy now and refinance later if rates do go back, because they may not!
  • WORK the summer while others are on vacation! Opportunities are always available; the summer makes it simple because frustration factors and pressure to timelines go way up! Be the solution!

If you have a specific issue or challenge, please let me know and we are happy to work with you on a strategy or a solution for your specific challenge!

Questions or comments: Mike@IMTcoaching.com

You will not want to miss this upcoming event!  Don’t miss CROSSROADS….

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“Size Matters”

There has been a great deal of conversation about “price compression” and “shrinking margins” in the industry lately. Companies, managers, and originators are seeing increasing competition from all angles, and generally what happens is the weaker will do more for less in an effort to stay around. We are also facing outside pressures that are pushing competition:

  • Originators who were buying leads and pounding refinances are hitting the streets and competing for purchase business. Since they have no track record in successful purchase business, they focus on price.
  • We also see that many large financial institutions are reducing or eliminating retail sales, forcing even more people out into the street. Once again, no track record, price is all they have.
  • The large internet lenders who spend millions on marketing and TV commercials. Since many agents won’t accept their pre-approvals, they must push price.
  • Mortgage companies themselves are spending time and money growing wide instead of deep, putting pressure on their own people.

The next factor is that many originators have chosen not to do the work in their own business and have resorted to hiring assistants to do the very job they are hired to do. While assistants certainly have a place in loan originations, managers and originators need to focus on scale and value. There is only so much money in origination. The breakup of that money between the company, branch, and originator has to be addressed because you can’t lose money on every deal and make it up in volume! So you must get clear on what is the real value in a loan origination and what part of that goes to the originator?

The next important piece is what “work” is required by the originator or originations team to have earned that money? This varies widely from place to place and even originator to originator. In my book, the originator is responsible for all the tasks needed to take the loan from contact to file fully ready to process; then support any communication from the processing/underwriting/closing/post-closing team if needed. That is what “top commission” is worth in any format. Now, managers and companies may want to reduce that obligation to the originator, or the originator may want to hire help so they can go on and produce more opportunities. That is fine, as long as all of that support is being paid for out of the total commission set for the origination of that file. It can’t work any other way. There is only so much money to be paid out!

 

The other key area is when do we look to get help? To me, a fully commissioned originator needs to be able to close 8 to 10 loans a month for a minimum of six consecutive months before entertaining bringing on help. The reason for this is you need to develop your systems and skills over both time and volume. If you don’t, you have to keep hiring people to cover for a poor system. That is a waste of money and doesn’t provide for a great customer experience. So rule of thumb is 8 to 10 loans a month, then you will hire on one assistant for each additional 5 to 10 loans a month in volume depending on the types of loans you are doing and your market.

Many originations “teams” or overloaded with people. Instead of organizing themselves and perfecting their system and schedules, they just hire more people! In the past, you might have been able to get away with an excessive number of people, but as margins compress, companies are going to have to think about how they spend their money.

Size matters! Your system matters! Your income matters! If you want to hire people so you can generate more opportunities, that’s great! But you have to be real with what your expectations are. Growing your team should mean:

  • A better customer experience
  • A smoother loan process
  • Higher quality loan submissions
  • Increased volume!

So look at your process and the systems you are using. If you have a team working with you, do you meet the monthly volume requirements? If you have grown your team and your loan volume isn’t growing at a minimum of 5 additional closings a month for each team member after the first 8 to 10 for the team leader, then your systems need to be addressed as well as your compensation!

Questions or comments: Mike@IMTcoaching.com

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Questions or comments: Mike@IMTcoaching.com

“The lack of housing inventory; a simple phase, or a new reality?”

In coaching my clients across the country, the common theme for the past few years has been the lack of inventory. Inventory; or homes available on the market currently listed for sale, continues to shrink and total days on market gets smaller.

In many areas of the country, this has been an ongoing battle for quite some time. In certain markets, inventory pressure goes back almost a decade! As we continue to see this happen, I have to ask a few questions that might not have simple answers, or answers that are the same in all markets. I ask the questions so you will think about the questions and maybe have a discussion about them.

Since real estate is really a hyper local situation, your ability to engage in this discussion with your Realtor® referral partners is very important, maybe even critical to you and your relationships.

So here we go:

  • Are there fewer houses for sale this year compared to the same time last year?
  • If so, have total days on market fallen, if so, by how much?
  • Are you experiencing multiple offer situations, and are people offering significantly higher than list price on these homes?
  • If offers are higher than list, are you having issues with appraisals?
  • If you are, does the buyer pony up, the seller come down, or the deals falls apart?
  • What is this doing to home prices in your market compared to national averages?
  • Are higher interest rates slowing down the market?

These are all important questions, but I have one more to think about. What if this is now the new normal? What if the housing market is becoming more “real time supply chain” as other types of businesses? I ask this because despite the “lack of inventory” and higher rates, home sales are higher year over year. So people are still buying homes, even though there is less to see and it’s more expensive than it was just a few months ago.

What if we never go back to a three or six month supply of homes on the market? Could this be the new normal? If it is, how do we change in the way we do business to be in front of those opportunities in the future?

More and more I believe that the future of real estate and mortgage originations are dividing into two paths; the path of transaction sales; where you pay for and filter leads to try to convert them; or relational opportunities that present themselves to you because you have databased effectively and marketed your relationships with outstanding value month after month.

It’s an interesting conversation we need to engage in. I may be completely wrong, but all the math and logic says to me that the new normal isn’t completely out of the world of possibility! What do you think?

Questions or comments: Mike@IMTcoaching.com

“Stop looking for leads, generate opportunities”

It seems like the entire real estate/mortgage industry is heading down a path that is obsessed with lead generation. With rising rates and tight inventories, people are flocking to seminars, webinars, websites, and social media to spend all kinds of time and money to find leads. The issues are numerous with this concept, too numerous to deal with in one blog post, but the pure focus on lead generation is absurd and expensive. One of my clients told me that one of his realtor referral partners urgently called him because there was a popular service zip code now available for just $4,800 a month. She was very excited about this deal. I expressed to my originator that if this was truly worth the money, why did the last person give it up?

Another client I have was generating almost 200 leads a month. He had a team of eight people and converted about 20 loans a month. He came to me frustrated that his days were consumed with chasing prospects and documents instead to spending time talking to those referral partners he really wanted to work with. In the past year he has worked to reduce his lead generation activities and worked on creating opportunities for him and his referral partners to locate and assist the very people they wanted to serve in the first place. In the one year he reduced his overhead by more than $40,000 just in useless credit reports! He was able to eliminate two full time positions and convert another two positions to opportunity generation and relationship management from processing leads that were never going close.

In addition to those cost and staff reductions, the number of total hours worked was reduced significantly at the same time they were able to more than triple the amount of time spent with personally connecting with clients and referral partners. The result has been a real change in his business and quality of life. The contact to closing ratio has gone from less than 9% to more than 30%. He anticipates that by the end of this year he will see that grow to 40%! At the same time they are closing the same or more units each month.

By understanding where your business comes from and the type of people you really want to work with, you can vastly improve your business and not sacrifice results. You don’t get paid to generate leads; you get paid to close transactions. You need to fully understand where your business comes from and the time and money it cost you to make that happen. As I have said before, your process acts like a filter. Share the proper process, you will find the client’s and referral partners that control those opportunities. You must understand that it’s the quality of the customer experience and the value you provide to your clients and referral partners in the execution of your process that generates the opportunities you are looking for.

So compare your business to the “Referral Triangle” to see where your business is coming from. See if the time and money invested into your prospecting is generating the return you are happy with. If the percentage of investment isn’t equal to the return; you may want to rebalance yourself and make the most out of your efforts.

There is real change in our industry. Everyone seems to be in discount mode and ready to give away their money for the sake of closing a transaction. Well, unless you have an endless supply of money, you can’t ever lose money on deals and make it up in volume; that never works! The power is in being an expert. The value is found in the quality of the experience. It’s not about leads; it’s about closed and satisfied customers!

You can get a free copy of “The Referral Triangle” on the website: www.IMTcoaching.com

Questions or comments: Mike@IMTcoaching.com