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February 6 - February 27, 2020
You need to love creative problem solving, ultra-complex problem solving that can change people’s lives: problem solving that puts them in a home, or allows them to hang on to their current home.
a heuristic, is any approach to problem solving, learning or discovery that employs a practical method not guaranteed to be optimal or perfect, but sufficient for the immediate goals.
When an optimal solution is impossible or impractical, heuristic methods can be used to speed up the process of finding a satisfactory solution.
Adopting this mind-set—that it is always your mistake—is the very best way to learn not to keep repeating the same mistakes and assigning the blame to others.
Rule 1. Never leave a field in the application blank.
Rule 2. Always ensure you are filling the blanks with answers obtained verbally from the client. Trust but verify (the documents and the client).
A heuristic is knowing that at today’s interest rates with less than 20 percent down mortgage payments are $450.00 per month per $100,000 borrowed, or with 20 percent (or more) down the monthly payments are $400.00 per $100,000.00 borrowed.
Heuristic = acceptable simplicity. Shortcut = mistakes.
This is a complex business. It is a technical sales role.
You need a technical mind-set—or the assistance of someone who has one—that rivals that of an engineer, pilot or architect. You also need sales skills, the interpersonal, emotional management skills—or the assistance of someone with such skills—that rival the best.
You must re-qualify in order to move the mortgage to another property, even if you wanted to move to the house next door.
the aggressive guideline changes set upon us every year since 2008. The November 2012 introduction of the B20 guidelines made for a very tough 2013 for Brokers and clients alike.
Want some good karma as you start out in this business? Use the services of a Mortgage Broker for your own refinance file. To do otherwise, because you “have a relationship with your bank”—well, get ready to hear that line a few times yourself.
Although many will claim being able to “work” from home as one of the benefits of brokering, this is largely the talk of a “lifestyle-broker,” and this book is not about lifestyle-brokering; rather, this book is about the business of real brokering—brokering as a real business.
download the audio version of that book I already mentioned: Relentless by Tim S. Grover.
So get your head in the game, and focus. Be in a dedicated office space on a daily basis for a specific set of hours. That physical space is going to help you maintain focus and build momentum.
One tends to have an excess of either time or of money, but rarely both simultaneously.
“Your beliefs become your thoughts, Your thoughts become your words, Your words become your actions, Your actions become your habits, Your habits become your values, Your values become your destiny.” — MAHATMA GANDHI
be sure to read The Power of Habit.
Brokering is laden with complex information, details and nuances, all of which one must be totally immersed in. You will be hard-pressed to find anybody who is competent at one complex job—let alone top-performing—while also simultaneously working at another job.
Unicorns Are there people out there who are simultaneously a top-performing Broker and top Realtor? Or a top Broker and also top Certified Financial Planner? Absolutely, but they’re unicorns.
Don’t try to be the unicorn-riding-Sasquatch. Instead, focus on being the very best version of you, the Mortgage Broker you, that you can be.
Self-Talk and Self-Defeat Keep in mind that the average person processes 50,000 words of self-talk per day. This is a lot of chatter flowing through your mind, and through your clients’ minds, and on average three-quarters of these thoughts are negative. To put this in context, the average business book is approximately 50,000 words. So ask yourself, why are we each writing a book about ourselves on a daily basis that tells us we suck?
Send a daily email to each client updating them on the file progress (or lack thereof). This should start from the day they have an accepted offer or a request that you trigger their renewal or refinance transaction. Give a daily update, every single day between the start of that transaction and file complete status. Then send the client a weekly email until the completion date. Keep communicating—positively.
Chapter Tip: Do not write off the power of your belief in finding a solution to a file. As soon as you quit, all hope is lost. Have you truly made every single last effort you can to get a file complete? Truly? If you believe, then you try harder, and when you try harder, you succeed.
“Nobody will work harder to win your clients’ business than me. And if you become my first genuine Realtor referral partner, I am going to be loyal to you until I leave this business, decades from now.”
You should have one goal: to get a completed application by the end of the client’s very first call to you.
A. The clients are effectively entering into an “all indebtedness” mortgage, which brings any other debts with that same specific mortgage lender under the umbrella of the registered security against the client’s real estate. In other words, cosigning a credit card or car loan for somebody who stops making payments with the same lender as the one holding the client’s mortgage can ultimately result in a foreclosure notice against the property.
Consider that if you slam the CC (for no other reason than your own personal concerns) and then a chartered bank is in fact the only option, as no other lender will approve the file, then you will have painted yourself into a corner.
Negative talk has negative consequences. Be positive. Be informative.
There are at least eight other important considerations worth discussing, such as prepayment penalties, collateral charge registration, prepayment privileges, fixed vs. variable, 2-year, 3-year, 4-year fixed, etc.
“Rate is the easy part; we all have access to the same rates. What you want are maximum options along with that best rate, as all mortgages are most certainly not created equal.”
from the start you want the client to understand the value and knowledge that you bring to the process.
Scripts. Practice your topic transitions, and practice your explanations of various related topics. Strive to be focused and brief.
“In many cases your Broker is able to act as an unbiased intermediary with your own bank or credit union. In other words, you can have the best of both worlds: an independent advisor aware of all other options, and your mortgage placed with your own lender in the right product for you—not the right product for the lender.”
“There are often excellent reasons to have your personal banking with one institution and your mortgage with another. Let’s talk about collateral charges…”
“That might seem like it goes without saying, but I take it a step further, and I also will not mention your name to anybody. I could have another applicant from the same company, but I will not ask if he knows you, nor if you know him.” “Your privacy is paramount. I am the vault.”
“I do not own golf clubs, or a boat; my hobbies include mortgages—I am here for you when you need me.”
The Rate Question “Your concern about the best rate is always the number-one question that clients have. However, it is not only number one on the list, but it is also number 10 on the list, and there are eight other things we are going to discuss before we circle back to it—things that matter, or may matter. Either way, you need to be aware of them: What’s your best rate? Prepayment penalty math. Variable or fixed? If fixed, how many years? 1, 2, 3, 4, 5—never 7 or 10. Collateral charge discussion. Secured line of credit? Unsecured line of credit? Overcoming thin or bad credit? Strata
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“I do not send out a link or paper application for you to complete. Instead, I build 99 percent of my applications by telephone. I like the conversational approach; we each get to understand what is important to the other.”
“As I mentioned, I am in an office all day every day, and if you want to come see me, I am here for you.”
The bulk of the raw materials for educational data come from four different sources: Mainstream media Gossip Books Experience
Regarding rates doubling, most clients assume their payments would also double. Nope, not true. A 100 percent increase in 2016 interest rates equals a 30 percent increase in payments—possibly less, depending upon government policy changes in reaction to any such increase (e.g., extending amortizations back out to 40 years).
“In the absence of information about value clients will always default to asking about price.” — MURRAY SMITH
if you sell on price (rate), then you will be outsold on price. It is a 0.01 percent death-spiral to zero profit.
To sell on rate, you need massive volume. To serve massive volume, you need support staff—trained support staff. To hire and train support staff, you need time, space and the ability to train. All of this requires significant capital investment.
The sheer volume required to make an online discount brokerage profitable, combined with the sheer volume of fixed overhead to support such a venture, creates a less-than-stellar business plan. There are some very intelligent people building this model of brokerage, people whose business acumen I greatly respect, but their model does not keep me up at night fearing for my own role as a full-service Broker.
“Rate is the easy part. We all have access to the same rates. It comes down to knowledge, ability to provide service and ability to filter out what is truly important to you.”
Be an information Broker first, and a Mortgage Broker second.
Chapter Tip: Worry only about things you have control over. This, of course, boils down to your own behavior. So that is it. Worry about how you think and behave. Do not allow yourself to worry about external events.
