Right now, across the country we are working in a crazy housing market. In most towns and cities, the inventory of homes available for sale just doesn’t meet the demand of families looking to buy. A seller puts their house on the market and in hours has multiple offers. It’s an auction market where the accepted offers are 10 to 20 percent higher than the asking price. Often the winner is paying in cash. The increase in home prices means that fewer families can afford to buy or to get into a bidding war.
But fewer potential clients isn’t necessarily a bad thing. Now is the perfect time to attract better clients. Here is how:
Don’t Waste Time on “Low-Hanging Fruit”
When it comes to referrals, it pays to know your product offerings and what your company is competitive in vs what your company/lenders don’t have an appetite for. If your pricing isn’t competitive on credit scores from 600-640, even if you CAN close the loan, you’re running the risk of getting shopped and dealing with more headaches than the deal is worth.
Implement systems to weed out the 20% of your prospects that are going to take 80% of your time. This may not have anything to do with credit scores. Rather, it depends on what your business’ biggest headaches are. For example, if you have a realtor that consistently sends you complicated self-employed borrowers who rarely have high enough loan amounts to justify the increase in workload, then “break-up” with that agent!
It pays to know your numbers
We recently pulled a report for our clients at Empower LO and found that while almost 50% of the applications that our clients received self-reported a 579 or below on their lead form, they represented less than 5% of the closed deals over the last year. Conclusion? Our clients do not need to take nearly as many apps in that category as they did (getting bogged down with low-hanging fruit). Those deals that DID close, took longer and required more work to close than the leads that made up the majority of closed loans for our clients. Leads that reported 620-700 FICOs.
Another stat our clients found? Over 90% of the applications that were taken on borrowers who self reported a 700+ FICO resulted in our client pre-approving that borrower. Knowing this, we work with our clients to implement systems and processes that limit the amount of time with a lead that self-reports a 579 or below, allowing them to focus on the best leads.
Improve Your Closing Skills
Our most successful clients sound very similar to each other on the phones. While they don’t follow a script, they all “guide” the lead through a defined process, typically the normal flow of a 1003, without the client feeling like they’re in an interview.
Jordan Belfort, the infamous Wall Street banker that the movie “Wolf of Wall Street” is based on, has a sales coaching program that he’s taught since the 90’s called “Straight Line Persuasion.” Currently, he has a book called Way of the Wolf which is basically a more modern version of the program. In it, he stresses the importance of keeping your lead on the “straight line” or basically moving forward through checkpoints that you need them to mentally hit before asking for the sale.
While this doesn’t exactly pertain to mortgage, the general idea of “leading” a prospect on a phone call is the same. If you’re confident and assumptive, as long as you can actually deliver on a high level, you will relay that confidence to your prospect no matter how qualified or “out of your league” they may seem.
While they eventually move on to running branches or teams of their own, our top earning clients are typically the best closers. Tanner, our Customer Success Manager, can usually tell right away how someone is going to do with our system after hearing them on the phone even one time. He listens to whether or not they control the call with confidence and assumptiveness while portraying themselves in a professional and warm manner.
The best way to improve your sales skills is to hire a coach
They will listen to your sales calls and critique them with you. Reading Way of the Wolf is a good start. Just remember, unless you have examples to listen to, or someone to provide you real time feedback, it’s really hard to know how well you’re implementing what you’ve read–whether you’re even on the right track.
At Empower LO, we know that closing is not typically something that loan officers work on improving. So we have recordings of some of our most effective loan officers that we share with all of our new clients. We also provide one-on-one coaching sessions that are geared towards being able to get more applications from high quality borrowers.
4 Ways to Capitalize On Your More Focused Approach
- Ask for referrals from those people you are closing loans with during this volatile time including clients, real estate agents, title companies, etc.
- Make sure you are social media tagging (get into the timelines of your highest quality borrowers). Ask these clients to take the picture and mention you in their Facebook or Twitter posts. Come on–you can do this. You just helped them buy their dream home.
- Track the quality of closings based on referral partners so that you can spend more time marketing to the agents that are giving you the best clients. If you have leads to offer agents, be sure to give some to your existing agents that are sending leads that align with what you’re looking for, and not to new agents who may or may not have deals of that caliber to refer over.
- Create a tiered ranking of your agents. For example, your best agents can be identified as “Platinum” resulting in a practice of “drop everything and respond” when your team receives any correspondence from that agent. Whereas if you have an agent that rarely sends business, and when they do it’s a headache (and you don’t want to just fire them), then maybe your team has 24 hours to respond to that agent based on their “Bronze” tier status
With the lack of homes available in your area causing a huge increase in asking price, fewer and fewer families can qualify for a loan. It’s stressful for mortgage officers everywhere, but fewer leads doesn’t have to be a bad thing. It can mean more time spent where it really needs to be…gaining better clients. Begin by implementing a couple of the suggestions in this article at 1st. Then add the next one that makes the most sense and so on. Small adjustments to your business now will mean meeting or exceeding the goals you’ve set down the road.
Thanks for reading, and as always, we’ll see you at the top.
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