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Unlocking the Door to Higher Volume
By Joel S. Pate
In last week's article, I discussed the basic absolute requirement of growing and then maintaining referral sources to successfully build your business to survive and even flourish in the face of any market condition.
I know an originator whose personal referral sources include four of the top real estate agents in his market.
The obvious question is, "How do you do that?" Well, it's not easy, and it will not happen overnight, but it can be done.
Last week I promised you a marketing plan to take to real estate agents in your market. I'll get to that in a few minutes, but, at this point, let's discuss the basics required of you to excel.
There are three basic keys to unlocking the door to higher volume:
- Develop a consumer direct marketing model that generates potential homebuyers and a method of referring those buyers to your real estate agents and builders.
- Develop a method for becoming the preferred lender of real estate agents and builders in your market.
- Develop and execute on systems that insure a high touch, high satisfaction experience with each customer you encounter. This type of program insures a continuation of business from the agents or builders involved in the transaction.
Remember, you are looking for and then remaining loyal to service providers that help you get things done and make your life easier. Whether it's your dry cleaner, mechanic, electrician, lawn service, builder, real estate agent, insurance agent, stock broker, etc., you are either searching for the service provider that will insure you the most consistent experience or you have already become loyal to a service provider in that particular field that continues to execute on an above satisfactory level.
Everyone is looking for a problem solver. Real estate agents and builders in particular need, must have, and will find originators that fit the bill.
What are they looking for?
- Knowledge
- Honesty
- Continuous and effective communication
- Great customer service
- Responsiveness
Do you notice one ongoing theme in my articles? KNOWLEDGE, KNOWLEDGE, KNOWLEDGE. Knowing your products is the first step to growing your business. If you cannot quickly and accurately determine the best loan product for a customer, provide the agent/builder with a quick response, and then deliver, you will never grow your business.
This reminds me of the originator that calls their AE for help on every loan. It is impossible to excel using this formula of product selection. Why? If you do not know all of the questions to ask, you cannot expect the AE to have all of the answers.
The mortgage business is complicated. It is the only business that I know of that the following statement is always true: "Yep, the guidelines are always the same, except if the co-borrower was standing on their right foot when they took out that particular revolving credit line."
By the way, that's one of the reasons why I like conventional and FHA lending. The guidelines are very settled and you know what to count on every day. Subprime guidelines have always been a moving target and what remains of the subprime business in the coming months will be even worse.
So to really build a business you must determine the niche you will become an expert in and then you must become an expert. To become an expert, you must have the knowledge to answer the majority of the questions. Even more, to paraphrase the author of the "Rich Dad" series, "it is important to spend a quantum amount of time working in a particular expertise. If you do, you will gain what is called a Quantum amount of knowledge. Then, you will instinctively know answers to questions you have never been asked or experienced. How? Your mind will have enough information to work with to sort through complicated information subconsciously."
In last week's article, "American Idol or Train Wreck-You Decide," I promised you a marketing plan that would assist you in building business with real estate agents. My suggestions for immediate action are below, but, I want you to begin to examine the following list. Which proven marketing plan feels right for you? Which plan may be better in your market? I can tell you without a doubt, if you market to the human resource manager on every loan you close, tell them that "John his employee" was happy with your service, and that you will offer $250 off the closing cost of anyone from that company that originates a loan with you, you will start getting loan opportunities.
CAUTION: Do not implement any of these plans without two or three weeks of consideration. Implementation equals time. You only have so much. Choose only one. When it is fully implemented, choose another, and then another.
- For Sale By Owners
- Investors
- Purchase leads
- Human resource manager
- Chamber of commerce inquiries
- Advertisement
- First time homebuyer
- Option ARM resets
- Reverse mortgage
- Direct mail
- Becoming a published author
- Start a radio show
If you have been in the business more than just a few days, you have seen many of these marketing plans advertised by "experts." You can readily find them in industry publications and especially in the Loan ToolBox.
There is absolutely no reason to recreate the wheel. And since I don't sell this type of information, I suggest that you purchase from the expert that developed that specific marketing plan. Be sure to choose the plan that suits you and your market.
So, you ask, what is my marketing plan for this week that is guaranteed to get you business?
Well really there are two for this week:
1. If you have loans in process, you should communicate with the real estate agents, both of them, via a fax every week. Simply create a form that marks the milestones in any loan process: app taken, VOE/VOD/etc. ordered/received, appraisal ordered/received, etc. You know the milestones. So, make a simple form, put your picture on it, you name and the phone number. Also, of course, include the agent's name, listing and selling, and the buyer's name. And then, fax it to both agents every week like clock work.
Call the seller. Introduce yourself. Tell them you are handling the loan for the purchase of their home and that you will keep them as abreast as much as you legally can if they want you to. Then, during a casual conversation, ask them their plans, and then ask them if you can assist them with the financing on the new home.
Statistically, 50% will say yes, and you will close a loan for 50% of those. So, ask four sellers, get one loan.
2. The second part of the plan is a little more complicated for new originators. But, after a week or so of working on a new agent, you should be able to make this work for you. First, let me give you the overview:
- Listing agent's sellers are growing concerned that their home is not selling as fast as they would like or as fast as the listing agent suggested.
- The listing agent is looking for a solution. Remember, he that solves the biggest problems makes the most money.
- One way to assist the listing agent with their seller is to introduce the idea of the agent recommending to the seller that they allow one of their preferred lenders to pre-qualify them for their next loan since "I expect your home to sell sooner than later."
- No, the agent is not setting himself up for a disappointed seller. Exactly the opposite occurs, especially when the agent knows how to pitch the idea correctly.
- The pitch: "Mr. and Mrs. Seller, since we are coming into the absolute best selling period of the year, and we are seeing an increase in buyer activity, may I suggest that you allow one of my preferred lenders to get you ready to purchase your next home since you will want to be ready to make an offer as soon as your home sells?"
It's that simple. But, what's in it for the agent? What's in it for the seller? Good questions. The answers are simple and diverse. First, the agent needs to know if they are about to make the seller of the home homeless. What if something has happened and the seller cannot qualify for another home? Or is looking at homes in a price range they cannot qualify for or would be satisfied with. Knowing this up front will make the Agent look like a professional and you too. Another key element is that the seller will know what they can qualify for and will then want to go look. This will prime them to accept an offer on their home because they are getting "goo-goo" eyed over another property. Just think of this as the "grease the wheels" strategy.
Does it work? Yes. Will it improve your relationship with the agent? Yes, if you handle the job professionally and impress the socks off of the seller. Will it get you loans? Yes, if you impress the socks off of the seller.
Being a successful originator, after all of the homework, study hours, preparation, system design, is about two things. Once the back office is set up to execute on a loan, perfectly, only two other actions stand between low producers and high producers:
- How many opportunities you have to take a real application from a potential borrower.
- How well you execute on those opportunities. Tim Braheem has a process called the Perfect Loan Application. Impressing the heck out of potential borrowers, impressing the heck out of real estate agents and builders. Impressing real estate agents and builders causes you to have ongoing and repeat business from them.
IT'S THAT SIMPLE.
That's it. The secret of the expert has been revealed. Until next week, do a lot of thinking, act on what you determine to be the best for you, work, work, work, work, work. And then THINK SOME MORE.
If you are interested in learning more, visit 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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