Carl White

We’ve all heard an LO saying with great pride, “90% of my closings are purchase deals and not refi’s…” like that’s some badge of honor…

… in reality, THAT IS A HUGE MISTAKE!!!

Now, I get it, the reason so many want to use that as their victory chant is because what they are really saying is “whether rates go up or down, people still buy houses and my mortgage business is stable and not reliant on refi’s and dropping rates”…

And that’s somewhat true, but it has a huge flaw that is likely costing them tens of thousands of $$$ PER MONTH, and they don’t even know it.  Read on..

I have found the most “healthy & stable” ratio is 70% purchase and 30% refinance. 

Here’s why…

If we are refi heavy, doing more refinances than purchases, they are right, when rates go up, these cats fall off the highway faster than a 1971 Ford Pinto on bald tires.

And the real problem with that is, now these LOs which have been ignoring Realtor relationships for purchase referrals, all of the sudden they are starting from scratch and trying to establish relationships, which doesn’t help them with closings this month..

Here’s the thing though, if we are purchase heavy, like the LO boasting they are at 90% purchase, that means they are not farming their own past database for refinance opportunities…

This has 2 problems.
#1  We have the moral obligation to help our past clients when it’s in their best interest to refinance and they just haven’t been made aware of this opportunity (our fault).

#2  We would be missing out on these closings which can add up HUGE when it comes time to the $$$ we make each month.

Last year, my mortgage team ended up closing about 68% purchase and 32% refi’s, very very close to the “Holy Grail” 70% purchase / 30% refi.

Earlier in the year, if we see that we are trending purchase heavy, more than 71% purchase, then we know we need to up our game with marketing to our past database (and / or friends and family if you are new to the business).

If we see that we are refi heavy, more than 31% refi, then we know we need to step up our game on our referral partner marketing, which is actually pretty easy.

So using that matrix, whether rates go up or down has never really had an effect on our growth.

We’ve grown every year.

Always remember that with the refi’s, a lot of our people aren’t refinancing to get a better rate necessarily…

…they are doing it for cash out debt consolidations, to cancel mortgage insurance, perhaps getting somebody off the deed, maybe to cash out to buy a 2^nd home or investment property(s), really any number of reasons.

But we don’t know how we can help them if we don’t call them, with a very simple phone script (that I’m happy to share with you), to check in and see what opportunities there are for us to help them (and make a commission check when we do).

So take a few minutes to see where your ratio was at last year, and then decide what to focus on first, marketing to your database (if you are over 70% purchase), or to focus on referral partner relationships (if you are over 30% refi).

Let me know what you find.

We hear it all the time… 

“You have to bring value to your agents”

And you know what, “they” are right…. And perhaps “they” are missing the real truth..

Here’s the problem.  So many LO’s hear that and then freeze because they think (and have been mistakenly told) that they have to….

… bring their agents buyers

… help the agents build their business

… teach classes
… become the agent’s personal assistant and errand boy/girl

And the list goes on and on and on and on
<usually fueled by somebody trying to sell you something you don’t need>

So now the LO is led to believe that before they can get referrals, they have to learn how to do all those things first… which most of the time never happens…  

Classic overwhelm that is totally unnecessary.

…which results in the loan officer stuck with yet another mediocre month of closings and / or another month of slow, if any, growth.

And even for those LOs that do spend all their time doing those things and finally “deem themselves worthy”, what if you found out all that was totally unnecessary and putting in all that work actually slowed your growth…

Here’s the real truth of it all…

YOU ARE ENOUGH!

Let me explain.

The thing you bring of value is “YOU”.

For example, let’s say your friend owns a car wash.  Where would you go to have your car washed?  At your friend’s car wash of course.

Even if another one was a bit cheaper and / or a bit closer.

I want you to think of who your best friend is.  Got their name and their face in your mind now?

Now I want you to think of why they are your friend.  Is it because they come over and mow your yard every Saturday for free?  Do they come over and clean your windows every Monday?

Of course not, that’s not why they are your friend.

They are your friend because of how you feel about them, and how they make YOU feel when you are around them.

Now, if you REALLY needed your yard mowed and your windows cleaned, would they come help you out of a bind?  Of course they would.  Just like you would for them.  But the actual service isn’t why you are friends.

Same thing with referral partners.

I work with people who I genuinely like.  We just happen to do business together also.
These are people who I would hang out with anyway, we just happen to now work together also.

And here’s the other “truth” I have discovered.  There are over a thousand agents in our areas and there’s only 1 of you (me).  That puts the odds highly in our favor. 

It turns the table that YOU are the prize.

Now, with our friends (agents) that we work with, do we refer business to them when the opportunity arises… of course.

Do we help them build their business once we are working together… yes.  But keep in mind, I have found it best to work with very successful agents who already have a successful business and they really don’t need any help in that area.

Do we teach classes?  Well only if that is something that you truly enjoy doing, of course.  But understand, it’s totally not necessary.

Do we help them with social media?  Perhaps, but again, only if you already know how and only if you enjoy doing that.

They don’t work with us because of those things.  They work with you because you genuinely like them and people like people who like them and then refer to those people that they like.

In other words…

YOU ARE ENOUGH.

Now, do we need to close their loans on time.. yes

Do we need to give great communication during the loan process.. yesDo we need to follow up on their referrals like green on a pickle so they get more referrals from those leads going forward… absolutely. 

By the way, that’s the 3 things that over 10,000 agents said were most important to them during a large survey I did with agents.

So instead of spending a ton of time on doing things that are actually totally unnecessary, let’s spend that same time and energy actually connecting up with the agents who are already successful and simply find out which of those we have a natural connection with because….

YOU ARE ENOUGH!!!

Then and only then, of course you can learn how to help out in other ways… even though that is likely totally unnecessary.