The 4th Quarter!


So here we are; beginning the 4th quarter of 2018 and there are many choices to be

made. To some, it’s a time to relax and take it easy now that the summer real estate

rush is over. To others, it’s a time to look at the year and see where they stand in

relationship to their projected outcomes. For me, it’s a time to push my people not

to give up on the valuable momentum they have generated year to date. The sad

part in general is that so many people won’t even acknowledge that we are at a

critical point and therefore they do nothing!


For those that coach athletes in team sports the fourth quarter is a time were the

best step up and produce. It’s a time when even a less talented group outperform

those with more ability because they were in better shape and were able to execute

under the pressure! It’s the time when the training and your system all come

together and form a collective energy to accomplish great things. This is what

changes the numbers on the scoreboard and creates real accomplishment! In our

business, it also generates all the energy to start the next year off at full steam!


So let’s take a quick look at some key things we need to be doing right now.

• Check your math! What are your numbers?

• Who is hot and who is not?

• What does my calendar look like?

• Halloween?

• December?

• Prepare for Business Planning in October!


These are all small and simple steps that need to be done. No false images, no

hoping or guessing; just do the math and do the work! There are a ton of

opportunities coming your way and you can really benefit because others are

backing off and winding down.


Time to focus on the four “Bs”:

• Balance

• Birthday Calls

• Banker Calls

• Business Plan

You have to balance your prospecting to reflect your time and outcome verses the

actual relationship between opportunity and outcome.


You have to schedule and physically make your birthday calls every day!


You have to have make your ten to fifteen banker calls every month!


You have to set aside time to prepare your business plan for 2019!


The fourth quarter is here and you get to make some critical choices. If everything

is going well and you are exceeding all of your projections, make larger

projections for 2019! If not, what around you has to change?


The Business Planning Worksheet for 2019 is already on the website

( If you are a manager or owner and you are interested in the

one day business planning event, please email me and we can talk about the

details. For those of you who have been through this before, the Business Planning

coaching call and the worksheet we get you ready and prepared.

Questions or comments:

“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:

Questions or comments:

“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:

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“Lack of Inventory isn’t the Problem!”

It certainly appears that everyone in the media and most in the real estate business are complaining about a lack of inventory. It seems everyone has become focused on this mantra for one reason of another. My opinion is that if there is a lack of inventory, then it’s the result of people failing to take specific action! Here are a few examples of what I mean:

If there are more buyers than sellers in your market and there is this lack of inventory, why aren’t people taking advantage of this new found “seller’s market” and selling? Clearly nobody has made the case for them to do so. So when people who could take advantage of an opportunity, don’t take advantage of the opportunity, they are either uninformed or uneducated. Both of those are solvable by effective and specific communication.

When current homeowners who could list their homes and buy another home and don’t; it’s because they weren’t aware of the cost and value differences of what they own verses what they would like to have. Once again the lack of effective communication and specific strategies are missing from the equation.

In most markets in this country there are specific price points where there is a large amount of inventory for those people looking to buy. The question is; do you know where that level is and how to work that market to draw attention to those who could buy? Sometimes the markets flow from the bottom and push their way up; but in other cases the market can be pulled up from the top! So are you identifying the void and using that opportunity to create activity?

Right now we are facing the end of the school year. Many people who would like to sell and buy, would sell and buy IF somebody shared with them a strategy to succeed! For those that have small children who will be starting school in the fall, moving closer to the school or a better school would be a great reason. Someone just needs to let them know it’s possible! How many families are sending their kids off to college in the fall and no longer need all the space they have? Those people would be a great target to work! Last but certainly not least are the teachers and administrators themselves. How many are changing jobs and moving to new schools? All of these are reasons to connect and communicate.

The lack of inventory in your market isn’t because the homes don’t exist; it’s because people don’t know that it makes sense for them to MOVE! If you aren’t going to be the one out on the streets sharing the message, then you are likely the one sitting around complaining that the reason you don’t do more business is that there is a lack of inventory. In reality, you don’t do enough business because you don’t talk to enough people!

So get out and use the success strategies we have shared here in the past to help create the movement in the market you need. If you wait for someone else to do the work, they aren’t likely to pay YOU!

All of the success strategies can be found at or through

Questions or comments:

“Resize the Net”

I have often had this conversation with my clients, but don’t believe I have shared this particular thought process before in writing. The concept of “Resizing the Net” is something I have shared with my younger or newer clients through the years and has proven to be a solid tool in growing the business. The concept is pretty simple; there comes a point in every originators business when they must either shift gears in their business approach, or be content with their level of performance. The saying; “If you do what you have always done; you will get what you have always gotten!” kind of rings true here, if you don’t change your efforts, it isn’t likely you will change your outcome!

So what do I mean by the words “resizing the net”? Well, it’s really pretty simple. When new originators head out into the world looking for opportunities, they pretty much talk to anyone and everyone in hope of finding an opportunity. This takes a great deal of time, but to the new originator with nothing else going on, this provides a way to keep them busy and refining their message and approach. Early on, any conversation is a good conversation. Any approach is a good approach. The feedback alone is worth the effort provided you are making adjustments and tracking results.

In the beginning you get the attention from less productive referral partners and less likely successful transaction opportunities. The less productive people have the time to talk with you, as well as a number of failed transactions they can give you to look at and work on. Some may have merit, but most are likely never coming together! The better referral partners, the ones we would all want to do business with either already have trusted people in place, or aren’t going to give you a chance to sell yourself because you just can’t prove that you can do what you say you can do! Let’s face it, nobody ever walked into a real estate office and said, “My Company stinks! We can’t close a loan on time! Our rates are lousy! And our closing costs will be higher than you can possibly imagine!” Everyone says these things, but how would anyone know if you can deliver? The simple answer is, they can’t! So, the better people spend their time working with those who have proven themselves.

So how do we prove ourselves? You do so by first going out and taking whatever opportunities you can find and quickly making the determination if you have a real deal, or just a fantasy. Sooner or later you will come across that real deal! When you do, execute quickly and follow-up strongly! It is likely that the other people involved might just be that professional referral partner you really want to get in front of! If you do a great job, people will take note! You may not get an opportunity to meet with the other people, but you will have planted the seeds for the second and third time! And believe me, since the better partners do more business, it won’t take you long to get opportunities two, three, and four!

Resizing the net comes when you have spent your time putting in the ground work to begin doing deals and making connections to the better referral partners. Just as you would do as a fisherman who wants to catch bigger fish, you use a net with bigger holes to allow the smaller fish to slip through and retain the larger ones. Your systems are your net! At first, you talk to everyone and spend a lot of time working on “deals” that will never go together. As time goes by, you get the opportunity to open up that net, spend less time chasing everything and working on the real things that will lead to real opportunities.

So ask yourself, “Do I spend more of my time being busy or being productive?” If the answer is busy, then you need to improve your systems and resize your net!

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“Numbers tell the story”

Stock market near all-time high levels, yet nobody seems happy with the economy. Interest rates near the all-time low, and we have the lowest percentage of home ownership in decades. Pressure on both listings and rentals are causing multiple bid situations all across the country and yet builders are reluctant to engage in large scale development. These are just a few of the stories of our situation that might make you pause and try and figure out what is going on.

63% homeownership is the lowest percentage many of us have ever seen; falling almost 5% in less than ten years. The entire mortgage meltdown was caused when guidelines were relaxed or eliminated trying to move that number from 67% to 70%, and now we find ourselves not better off for the experience. Many lost their homes that they could have never qualified for in the first place. Those properties falling into trouble put pressure on the rest of the market and the slippery slope got really steep in a hurry!

Builders who bought huge tracks of land and started many projects were left without buyers and sustained significant losses. Even the biggest and best builders were not exempt from losses and they have become far more cautious and are not in a hurry to expand broadly, at least not at the moment.

The Federal Reserve Board who seemed to be in a hurry to raise rates seems almost to have regretted raising rates just that little .25%! Now the markets seem almost sure that another rate hike won’t happen this year! Looking at the ten year near all-time lows, and oil pushing back below $40 a barrel, is anyone comfortable and confident?

Then we add into the mix a presidential election that most people are unhappy with and two seriously flawed candidates that each would likely have lost to just about anyone else, yet here we are!

So let’s look at some numbers that can really matter. People will argue that credit standards and people with declining credit scores are the reason more people aren’t buying homes. That argument is just that, an argument. It isn’t based in any fact. The reality is more than 75% of the population has good enough credit to qualify for a mortgage loan. Some may argue that income qualification is too difficult to become qualified for a mortgage. Again, if you really earn the money you say you do, and you can really afford the money you would like to borrow, there are many products and programs that will help get the job done!

In my opinion, these numbers just don’t add up to a falling homeownership rate. And when the cost of owning where you live is less expensive than renting where you live in most of the markets we all service, the only conclusion I can come to is that as an industry, mortgage professionals and real estate professionals aren’t doing a very good job getting the word out about all the benefits of homeownership.

Each and every one of us needs to connect with our referral partners and look at our specific market and review the local numbers. What are the facts behind supply and demand? What are the real numbers rent verses owning and with the likelihood of home prices and mortgage rates both being higher in the next few years, doesn’t now represent a significant opportunity?

So do the math. Know your numbers. Talk to your referral partners and gather all the information. Only then can you go out into your specific market knowing the numbers and why now is likely the time to either become a home owner, or to find your “Forever Home” and buy it and finance it before the cost of both go higher.

We may not know what is going to happen in the stock market. We may not know who wins the elections. We may not know very much about what the future holds; but we will all need a place to live! So why not get into that place now and lock in the cost before it goes any higher?

Information and education are the two things you can provide in your market on a very local level. Since all markets are local, get out and know your numbers and share that information with those around you! Become the local expert! That is where today’s opportunities are located!

Questions or comments:

“The Re-valuation Situation!”

What a ride! The mortgage backed securities market has seen a great deal of price improvement since the “Brexit” vote. We have spent the past couple of blog posts pointing out a winning strategy to help you ignite your business! One piece of the puzzle you can’t afford to miss out on is being sure you revalue all of your pre-approvals to reflect the new purchasing power of lower rates! Yes, as rates go down, that same monthly payment qualifies for a bunch more money! Depending on where you were pricing, and how much they qualified for, it could be just the thing to help you get your buyers off the fence and into a home!

So here is what we do. Go back to ALL the pre-approvals you have issued in the last six to nine months that haven’t closed a loan with you yet. Look at each pre-approval and recalculate their loan size given today’s new lower rates. Create a short thirty second, to one minute video explaining the new letter and why you have issued it, sort of something like this:

“I am sure you have heard a lot about the “Brexit” vote and the reaction in the financial markets. While your 401K might have taken a hit, these very same market conditions have caused interest rates to fall dramatically! This means your monthly housing payment now affords you a great deal more money! I have taken the liberty to rework your numbers and I will be sending you your new pre-approval letter by email. Please understand that rates may again rise quickly, but right now you have an opportunity to get more home for the same monthly payment!”

Post the video, email the video, and then get to work reworking your re-approvals and get them out! Don’t forget to send the video to your Realtors®! Also be sure you send the Realtor® a copy of the new pre-approval! This may be just the thing your agent needs to get their borrowers in contract! But don’t stop there! You need to call every Realtor® you work with right now and make sure that everyone they are showing property too, calls you for a revaluation!

Refinances are great! But lower rates provide so much more in the way of opportunities! Revalue all your pre-approvals! Call all of your agents and let them know NOT to show property to anyone who hasn’t had their pre-approval redone in the last ten days! These are two simple steps that will really help you provide value to your clients and your referral partners!

Questions or comments: or visit us online at

“Think About the Buffalo”

Mortgage origination is an opportunity business. You can’t originate a loan without having an opportunity. While doing a training in St Louis, I tried to explain to the group about taking advantage of all the opportunities that present themselves during each transaction using the story of the American Indians and their relationship with the buffalo.

In the 1800’s, the American Indian followed huge herds of buffalo across the Great Plains. Indian braves would go out in groups a hunt and bring buffalo back to the village. When they were successful, it was cause for great celebration. The buffalo was the source of so much to the tribe and nothing went to waste. The hide was used for tents and clothes. The meat was prepared and a prized staple. The bones were used for tools and the very sinew on their bows. Nothing went to waste, nothing!

As loan originators, we need to be thinking of our purchase transactions just like the Indians treated the buffalo, let no opportunity be wasted! It is not good enough to just do a great job closing the loan, each transaction needs to be looked at for all the potential referrals and referral partner opportunities that are contained inside. Here are some thoughts about what you may be overlooking.

Clearly the clients themselves are the first opportunity to be harvested. Have we collected their 9’s and 10’s?

Then we look at the file itself. Is there an accountant on the tax returns? Do we have a financial planner involved? Who is the insurance agent? Are we connecting to any of the Realtors involved? Did we remember to contact the seller?

Your transactions contain a wealth of opportunities. Just like the buffalo was to the Indians, your purchase transactions can be just as important to you as a source of opportunities!

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Action Plan #11 – Inspections

Property inspections are a vital part of the process but in general, we really don’t do a great job getting ready for the inspection, and allow far too much time to get it done or to negotiate repairs. Not that I have an issue with people taking their time, it’s just unreasonable to believe that you can enter into a contract allowing ten days for the inspection, then run the possibility for a few days of back and forth negotiating before the buyer is willing to accept the final terms and agree to authorize the appraisal chargers. Remember, if the customer doesn’t authorize the charge for the appraisal, the deal is essentially on hold until they do. While we will talk at length about appraisals next week, it is an important factor to remember that a delay in ordering the appraisal is a delay in the file timeline!

So let’s start with looking at the time needed for the inspection. First, there is no reason the all buyers do not have their inspector in place and ready to go to do the inspection. Most inspectors can schedule an inspection within 48 hours and get your report back in 72 hours. Nobody needs ten days to get an inspection done.

Next we deal with the inspection report and any defects that may need addressing. If you can’t get an agreement as to what needs to be done, who is paying for it, and who will be the judge as to if needed repairs were done satisfactorily, needs to be addressed early in the process so that all needed work is done and approved a minimum of ten days prior to closing and challenges can be dealt with without delaying the closing!

We have already covered the importance of the Listing Agent knowing the issues with the property BEFORE listing the property and being sure that the sellers understand the likely issues that need to be addressed PRIOR to listing the property. If those issues are left unresolved, it is up to the LISTING AGENT to explain to the SELLERS the importance of timely repairs or an extension of the time needed to close and the acceptance of any fees incurred by the borrower due to these delays. In a volatile interest rate environment, expired rate locks could get very expensive!

We all need to be more proactive in the selling process to understand all the issues that the home may have prior to listing it. Some people even bring in an inspector to do an inspection prior to selling so they can see what items require attention before listing the property. While many won’t bear that cost, a good Listing Agent can take the time to go through the house and find some of the blatant issues and ask some important questions about maintenance and repairs.

Working together and setting reasonable expectations and being prepared for making adjustments to the closing timeline are very important. Understanding that doing the work as early as possible can reduce the risk of delays. Nobody wants to delay a closing. The things we do in the very beginning of the deal can make all the difference. You might be able to recover from a loss of a day or two at the very start of the transaction; but toward the end you run the risk of missing the date completely and all the risks and expenses that may be incurred. Planning ahead and being prepared are the best chance you have to close on time and without drama.

Questions or comments: or visit us online at

Action Plan #9 – The Property

With all the talk about TRID and expanding the time it takes to close a transaction, we must continue to stress the point that preparation is the key to a smooth and timely transaction. Doing the work upfront, the work everyone knows will need to be done at some point along the way, is essential to making the transaction flow and go as smooth as silk.

This week we take a look at the subject property. There a few things that come to mind right off the bat that need to be addressed even BEFORE the property is LISTED for sale.

  • What is the legal definition of the property? You can’t assume anything. A townhouse may really be a condo! A SFR could be a PUD! You need to really know, because it matters!
  • Are there any open permits on the property? You can’t trust the seller to know this; you have to check official records.
  • Do the people listing the property really own the property and are there any legal entanglements attached to the property AND the people?
  • Does this property belong to an HOA or historic association that may hold sway over the deed transfer or who have restrictive covenants?
  • Property restrictions. Land size? Outbuildings? Easements?
  • Do we have well water or septic systems?
  • Property condition and obvious repairs?
  • If the property is part of an HOA or historical organization, do we have the condo questionnaire or the historical organization obligations filled out and handy for review PRIOR to contract?

How many times does one or more of these items delay a transaction? We know these are a few of the things that can cause a delay, why aren’t we coaching our Listing Agents to be more attentive to these items and to work with their potential sellers in getting the home ready for a smooth and timely sale?

Just like we work with loan originators and teach them to do a full document pre-approval and to note this on their pre-approval letters to make the buyers stand out and to show the world of the buyer’s commitment to a smooth and timely transaction; why aren’t we working with our Listing Agents so that they can prepare their sellers to be just as prepared?

We all know these things come up. But so many of the things that stall or delay transactions can be avoided or dealt with before the transaction even begins. If true professionals prepare their buyers and sellers by coaching them through what makes a smooth transaction, many challenges can be avoided. And isn’t that why we have a job? Isn’t that what we are paid for, to prepare our clients for a smooth and timely transaction?

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