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ARE YOU FOCUSED ON THE HOLIDAYS OR ON YOUR BUSINESS?
By Joel S. Pate
I am concerned for many of the readers of this article. Well, actually, I am more concerned for your counter parts in the industry than you.
But, for the moment, let's lump everyone in together.
What is your plan to grow your business during the next four months? You know you are thinking about it in the back of your mind. Even more, you are overhearing the bench warmers as they make plans to do everything but work during the next few months.
Have the naysayer's begun to scare you? Have you started to give into their negative thoughts: Rates are too high, no one wants to purchase, Agents are hard to talk to, much less those that read this column: "I don't know who that guy from Alabama is, but, I tried to get in with a builder and it didn't work."
"Yea, the builder gave me a shot, but" the borrower this, or the underwriter that, or the time of the year, or some other excuse to shield the real problem away from the only real issue in town that differentiates the doers from the bench warmers: You must take personal responsibility for your business, you must do it today, you must, stop talking to and being affected by the negative folks at your office, and you must begin to work a plan that is tried and true in any market, in any part of the country, at any time in the life span of the mortgage industry.
As I mentioned in last weeks column: No one wants a loan. So, when you ask someone if they want a loan, they say no.
What they want, and why they are willing to get a loan, is to have a new home, or a re-sale, or the money they will need to send their kid to school, or a second home, or the money to pay off a large bill, or a lot of small bills. They want all of these things and more, but, one thing is for sure, they do not want a loan.
But as you know, and they know, a loan is exactly what they are about to get.
To be successful, you have to become a part of the teams that are producing customers that need loans. You must find, and then communicate effectively with the consumers that need a loan, but do not want one.
That is the primary reason that loan originators loose loan opportunities with potential borrowers. If you understand that the person obtaining a loan really doesn't want the loan anyway, you know you must stay on top of them to keep their mind on what they really want: The thing they are begrudgingly obtaining the loan for.
You must act professionally. You must never give the consumer a chance to have an excuse to call another loan originator. You must never give the borrower/prospect a reason to complain to their real estate agent or builder about you.
If you truly satisfy your customer, a person who could potentially need five to seven more loans during their life time, you will not only keep that customer for many years, you will impress the person at the epicenter of the action that caused the prospect to want a loan in the first place. On the flip side: if you do not do a good job, you will fail to succeed in the mortgage business.
So, how do you do a great job? Good question. At the bottom of this article, you can click on the link to my website to view last week's article.
Now, as you know, I specialize in off balance sheet financing for small to medium size builders. Having built over 500 homes and assisted in over $4.5 billion in construction and residential lending, I can help you enter into the world of financing builders.
I want to make sure you understand what I just said: I don't suggest that you concentrate on financing builders' customer's end loans. That is easy, and everyone can do it. I suggest that you become an expert at showing builders how to use their customer's balance sheet to borrower the money that will be needed to run the builder's business. It's called: off balance sheet financing.
Off balance sheet financing is not a new concept. But, it is a concept that nearly every originator in your town does not understand. And it can make you a sought after professional who is highly regarded in the mortgage industry like no one else in your market, and like only as few as one hundred other originators in the country.
As the end of the year, and the latest mortgage cycle is winding down, many of the originators that read this article every week, and that have begun to study the information that I provide, are not worried about the end of the year.
They have builders sending them the business of buyers that have already made the decision to do the thing that will cause them to need a mortgage.
Beyond that, since the builder has decided to utilize off balance sheet financing, the builder is demanding that his customer use his preferred lender. Why? Because the builder has made a business decision to push as many of his customers to his off balance sheet financing resource as possible because he understands the benefits that this program offers him and he doesn't want to utilize another lender.
These are just a few of the benefits:
- No personal guaranty. He actually receives cash to use to start the home--OPM; Builders love to use-Other Peoples Money
- The ability to grow his business without borrowing money or bringing on investors
- The ability of the builder to offer 100% financing to many of his customers
- The ability for the real estate agent to receive his/her commission within 30 to 60 days from the contract instead of six to eight months when the home is complete
- Let me repeat number four: Utilizing this loan program, real estate agents commission can be funded at the construction loan closing instead of when the home is completed
- Let me expound on number four and five: Have you ever met a real estate agent that would not prefer to get paid sooner than later?
I don't think so. Agents want to get paid as soon as possible. And so do you.
May I suggest to you that you strongly consider becoming an expert in off balance sheet financing for builders as soon as possible? If you do, you will have very little if any competition in your market, you will become a business "partner" with builders at the balance sheet level-not like other originators seeking builders business that offers no direct additional benefit to a builder than any other loan jockey in your market.
If you would like to receive additional information regarding off balance sheet financing for builders, register for one of my conference calls by visiting www.vadiumgroup.com/cpexpert.php.
Dedicated to coaching YOU to CP Loan Success!
Joel S. Pate
Joel S. Pate, a dedicated entrepreneur, has spent more than two decades in the building, mortgage, and real estate industries and has been involved in over $100 million in construction loans and over $1.3 billion of residential lending.
As the CP LOAN EXPERT columnist, Mr. Pate provides straightforward, unbiased advice about every aspect of construction permanent lending. If you ever wanted to unravel the mystery surrounding new construction lending, then you should tune in.
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