Everyone knows that when the phone is ringing, business is good. However, how to get your phone to ring seems to be a popular question these days.
The fastest way to get your phone ringing is to contact your database! Many of the professionals asking this question have not been in regular contact with their database.
For example, we recently had one of our clients call us in a panic stating that he has seen a significant slow in his production, and wanted to know what he could do to get people contacting him again. We took a look at his records and noticed that he had not contacted his database of nearly 300 people in over a year! We immediately suggested that he send out a postcard to his entire database, discussing the recent rate cuts, as a way to get people calling again. In this way, he can make sure his database knows that he is indeed still around to help them.
It doesn't really even matter what you send, as long as you send something. There is no doubt that there is a lot happening in the mortgage and real estate industries, as well as the state of the U.S. economy as a whole. It is a great idea to send different messages each time to your database so they are always receiving something fresh from you - the keyword there is ALWAYS.
Now, more than ever, it is important to be in constant contact with your database! Show them you are still ready, willing and able to help them, still standing strong, and, most importantly, offer them peace of mind during these turbulent times that surround us.
Here are some ideas:
•· Offer Peace of Mind: Send a Turbulent Times Postcard to your entire database reassuring them that you are still the professional they can count on.
•· Send Value: Be sure to send things that people will want to keep, like Recipe Postcards, or Home Tips Postcards. People are likely to keep them around - thus keeping your contact information around too.
•· Give Them a Good Read: Newsletters are a great way to offer helpful advice and information regarding the things that are important to most people. Their home, their family and their finances.
Postcard mailings really work. Here's what a few of our clients have had to say about mailing postcards:
"I was previously just doing a mailing on a quarterly basis and I got about 6-7 calls immediately after the mailing with a database of about 500. We figured if we are getting that every time we mailed a marketing piece then why not do it monthly? And numbers have consistently been about the same. Right now I have a database of about 825 and I get 8-12 calls from each mailing." - Tim H., Coastal Mortgage
"A recent example of how effective the Auto Pilot Program is, last week I got a call from a first time homebuyer client from 2001. I am refinancing their loan and they are referring me to their best friends, who can't remember their loan agent's name! Thank you for the service and keep up the good work." - Sue B., Guarantee Mortgage
Keeping in touch with your clients and staying visible in your community doesn't have to cost you a bundle. Take a look at some creative, inexpensive and even free ways you can keep your business growing.
•1. Send a Digital Newsletter each month packed with useful articles and tips for your clients.
•2. Write a personal email just checking in and send it to ALL of your clients.
•3. Email a piece of trivia to your database each month, and award the first person to respond with the correct answer a $25 gift card to a restaurant.
•4. Hand out free balloons in or outside of your office. Make sure your business card is attached!
•5. Partner up and cut your marketing costs in half. Choose your favorite professional referral source and send out a postcard together.
•6. Host a neighborhood picnic/potluck. Invite your neighborhood either over to your house or to a neighborhood park. Provide soda, water and some snacks. Tell them to invite a friend too!
•7. Conduct a survey of your clients. Ask them what they most need right now, what their biggest fears are, etc. Follow up with each based upon the results- you never know who may need your expertise.
•8. Email a motivational or inspirational quote of the day to your clients.
•9. Choose one person per day from your database and send them a hand written note card simply saying "hi."
•10. Start a blog. Write about personal and business related topics. Send an email reminder to your clients each week reminding them to read it!
•11. Write a "tip sheet" relating to your industry and email it to your clients.
•12. Host a free educational seminar and invite your favorite professional referral source to present with you.
•13. Contribute an article relating to your industry to your local publications. Become the ‘local expert.'
•14. Choose five people per week from your database (starting with your top tier) and send them a $5.00 Starbucks gift card and a handwritten note to see how they are doing. They may call you and invite you to have coffee with them and talk about their current needs.
•15. Keep a vase full of carnations or inexpensive flowers in your office with your business card attached to each one. Make sure everyone (even the delivery personnel) take one with them when they leave.
•16. Call your clients. Choose 3 people each day and call them just to say hello.
•17. Offer free "Lunch and Learns" to local businesses to talk about your industry, products and how you can help them.
•18. Contact local business owners and create a "discount package". You can send this to your database as well as the client lists of the business in which you partnered up with.
•19. Check with local schools (elementary, middle and high school) and see if you can contribute an article or offer a discount in the newsletter that is sent to parents.
•20. Sponsor a charitable event in your area and invite your database to participate with you for a good cause.
•21. Post a well written and benefit driven ad and offer a discount for your services on Craig's List.
•22. When you find any statistics or fun facts about your industry save them and compile a list and email it to your clients each week.
•23. Ask local businesses if you can place your business cards or brochures in their offices for their clients to take.
•24. Contact all Alumni associations of schools you have attended and tell them about your services or new company developments.
•25. Sponsor a local high school sports team and get an ad in the team program.
•26. Sponsor a float in a city or town parade.
•27. Get car magnets printed and sport it proudly on your car. You can even ask that your office mates do the same.
•28. Go to your local bookstore with a stack of business cards and place them inside of books that relate to your industry. Even better, write a personal message on the back of your card- "hope to hear from you soon."
•29. Celebrate a season in your neighborhood. For example: plant mini flags in neighborhood yards (with business card attached) in July or place mini-pumpkins on doorsteps (again, with business card) in October.
Who says prospecting has to be painful? Why can't it be fun, fast and free? Holding educational seminars for your community, local corporations and non-profit groups can literally open the doors to a home for prospective buyers... and open the doors to new clients for you.
Here are ten tried and true tips to make your seminars successful!
•1. DETERMINE YOUR TARGET MARKET - Want to reach first time homebuyers? Market your seminar to newlyweds, parents-to-be and renters. Perhaps you want to reach subprime homebuyers? Hold a seminar on credit requirements and credit counseling. You may want to target your marketing to former bankruptcies and less than perfect credit individuals. Yearning for those "A" market homebuyers? Consider a seminar focused on investment property, tax implications of various mortgage products or on vacation homes. Target your market then market your target!
•2. TEAM UP FOR EFFECTIVENESS - When you team with another professional - be it another Realtor, a loan officer, financial planner, assessor or home inspector - you double your marketing effectiveness and make the presentation more interesting and valuable.
•3. OFFER AN INCENTIVE - It always helps to sweeten the pot... perhaps offer a coupon towards an appraisal, a free credit report, or even pizza.
•4. CAPTURE INFORMATION - Have attendees fill out a short form giving you an idea of what they are planning to buy and what their time table is. That way you'll know exactly when to contact them next, or whether to add them to your database for your regular client mailings.
•5. FIND FREE FACILITIES - Whether it be your office or another's conference room, a local library, church or community center, there are many avenues for finding free rooms for community enriching activities. A little research can save you loads of money.
•6. GET THE WORD OUT - Ads in local papers, group newsletters or bulletins can be very effective. Flyers are practically free, and press releases are free! Most papers and radio stations love to promote educational classes, especially when there is no charge to attend.
•7. DON'T WASTE YOUR MARKETING EFFORTS - Make sure to encourage a phone call or email even if people can't attend the seminar. Offer free educational booklets and encourage those interested to call you for them.
•8. OFFER FREE HANDOUTS - It's always a good idea to send people home with a little something to remember you by. It could be recipe postcards you've collected from your mailings, an amortization schedule, a brochure or your business card.
•9. SELL THE SIZZLE, NOT THE STEAK - Make sure to present your seminar as exciting and informative. Here are some sample titles: Homebuyer Secrets Every First Time Homebuyer Should Know, 15 Costliest Mistakes First Time Homebuyers Make... and How to Avoid Them, or Finding and Buying Your Perfect Home.
•10. DO IT REGULARLY - The real estate and mortgage professionals who are successful at seminars hold them on a regular basis. Be it monthly, weekly, or every other Tuesday, if people know you're having them, they'll refer others to them and come when it works into THEIR schedule. It may take a while to build a nice class size, but the effort and the wait will be worth it!
In observing the antagonistic relationship between real estate agents and loan originators throughout the years, I have come to the conclusion that it's mainly due to the fact that many loan officers or mortgage companies just throw out pre-approval or pre-qualification letters. They do this without properly analyzing the borrower's income, assets, and credit.
Real estate agents have every right to feel the way they do because of our industry's carelessness in putting out these pre-approval letters. This is a waste of people's time. Real estate agents are working late hours trying to put a sale together based on the letter that you have provided to your borrower. And then, thirty days down the road, the deal falls apart, and the real estate agent finds out that you didn't properly verify the information.
The other main reason that real estate agents really dislike loan officers is because they do not give true and accurate statuses on files. So if you just do these two things, which is provide a solid pre-approval letter and give proper and accurate statuses on the files, you're going to earn the respect of the agent you're working with in that transaction.
If you have pre-approved a customer, and there is a unique aspect to the structure of that transaction (for example, the borrower needs $5,000 in closing costs from the seller), make sure that you convey this to the agent who will be submitting that offer so that the contract can be drawn up correctly. Here's a tip that I've found great success with over the years in writing up pre-approval letters. At the bottom of your pre-approval letter, handwrite a note to the listing agent and seller to give them a sense of confidence that the transaction will close successfully.
If the loan is structured with a down-payment assistance program or a seller contribution, make sure that the real estate agent who is writing up the offer has this noted in the contract. As soon as that offer is accepted, your first call should be to the listing agent. Call them up and introduce yourself. Let them know that the loan is being processed in an efficient manner and that it will close on time, provided that everything goes according to plan. As soon as the real estate agents have that contract drawn up and fully executed by both parties, the ball is now in your court. It's your time to shine and show those real estate agents what you can do in processing the loan.
The most important thing you can do, to make yourself look good and rise above all the other loan officers out there, is to give weekly updates. Find out how the real estate agent would like to be updated, whether by fax, email, or voice mail messages. Note this in the file, and make sure that you provide an update once a week. It's a very easy way that you can set yourself apart from the service that other loan officers give.
If you have a bad experience with FHA loans is was more likely the loan officer you dealt with rather than the actually FHA loan or process. Working with an experience mortgage bank/loan officer FHA are rather easy and most of the time the best loan for the consumer. If you are working with a lender that does not utilize this product or has little knowledge you are doing a disadvantage to not only your success but to your clients financial future. FHA loans are typically much lower rates and less money down than conventional loans.
Before I answer the question "Why choose FHA as a Specialty", I'd like to give you a little background regarding how I came to do so. I remember my first week in the business about 7 years ago. The owner of another mortgage company came up to me and said, "Jason, if you want to remain in this business long-term, you need to know how to develop purchase business." Being new to the industry and scared of not being able to succeed, I really took those words to heart. Since that time I've always been focused on developing purchase business.
After about two and a half years in the industry, I became one of the leading government specialists for FHA loans. I spent the next two years developing myself in this niche in this area. After researching my market, I settled on FHA, and here are the reasons why.
The product has been in existence since 1934.
It has the lowest rates for fixed loan in the industry compared to conventional loans.
There are no credit scores. At this time, the government does not observe credit scoring. Although many lenders do put minimum limits on their credit scores, there are plenty of wholesale lenders out there that do traditional underwriting and don't observe credit scoring.
Use of alternative credit is allowed. It's possible to virtually build a credit history for people that have no trade lines showing up on their credit report, which we will explore in greater detail in another section.
100% of the money for the purchase can come from a gift, from a family member, or from the down-payment assistance program.
It's a purchase-based product. If you want to develop a purchase-based business, many of the first-time homebuyers out there are going to use FHA financing.
Six percent of the closing costs can come from a seller contribution, so you can be very flexible with the way you structure these purchase transactions.
The personal rewards that come with doing FHA loans are enormous. There's nothing more satisfying than taking a family that's renting and helping them become a homeowner. These customers often feel a great deal of gratitude to you for helping them achieve home ownership. As long as you keep your name in front of them, you're the first person they're going to contact in three to five years, when they go to buy their second home.
Lastly, and perhaps most importantly, you should consider specializing in FHA loans because of the increased income you're going to gain. Take a $135,000 loan for example. On an FHA purchase, with the 4 on the back and the 1 in the front, you're going to earn about $3000 on a 45% commission split. On a conventional loan, you'll maybe make 1.25% and earn $750. On a non-conforming loan, you'll maybe earn 3% which will give you $1800. So FHA has a tremendous ability to boost your income. And because it's one of the largest segments out there in the purchase market, as Greg Frost notes in the introduction to his home buyer seminar booklet, it represents 40 to 50 percent of the purchase market.
With the subprime market gone this is becoming popular again, most local small brokers do not have the ability, knowledge and the resources to lend on FHA loans and this narrows the competition down to lenders and give me a niche in a tough market place.
With a lot of foreclosed homes on the market the average home needs over $5,000 in repairs, this is a perfect fit for a listing agent to team up with an experience mortgage banker to offer FHA 203k REHAB loan to move a home that has just been sitting on the market because the average consumer does not have $5,000 or more after downpayments and closing cost to repair any improvements these home need. Marketing a home in conjunction with financing that will allow them money at closing to repair the home set yourself and your listing apart from the other hundreds of homes just sitting on the market because it is in desperate need of repairs.
These are just some of the reasons you should consider choosing FHA loans as a niche for yourself.
Seek a Qualified Mortgage Banker to Ensure the Best Results
Home Buyers Face Decisions that Affect Their Long-Term Financial Picture
Taking the step into home ownership is one of the most important financial decisions a person will make in their lifetime. There are many factors to consider when embarking on this venture. Literally hundreds of loan programs are available, and it is important to find the one that best fits your personal long-term goals.
First and foremost, you must have a mortgage consultant in your corner that is willing to take the time to know what your long-term goals are. Communication is the key factor here.
Curious prospective home buyers sometimes turn to Internet-based services just to see what current interest rates are. But a faceless web site will not take the prospect's future financial planning into consideration or guide the potential borrower through the many nuances of the loan process. When shopping for a home loan, be wary of web-based services that offer programs to reel prospects in with attractive rates that are based upon unrealistic time frames.
If a lender is offering a terrific rate based on a 10-day lock-in period, it is unlikely that the potential home owner would actually be able to find their dream home, get through the negotiation process and win approval from a lender within such a short period of time. This is called short-pricing, and when it comes time to close the transaction, the rate that was originally offered is simply no longer available. As a result, the unfortunate prospect is bulldozed into a loan program with a higher interest rate.
It is highly unlikely that a qualified loan originator whose business is based upon referrals will use unscrupulous tactics such as this to get new customers in the door!
Once you have found a mortgage consultant that you feel comfortable working with, lay your goals out on the table because it will have a tremendous impact on choosing a loan program that meets your specific needs. One of the most important factors to consider is how long you wish to borrow the money for. For example, if you know you will only be in the home for five years, it wouldn't make sense to opt for a 30-year loan program or pay points up front to secure a lower interest rate. You would not be in the home long enough to benefit from such action.
Your mortgage consultant should be able to narrow down a selection of programs based on the information that you have provided, and present you with an easy-to-read spreadsheet that clearly defines viable options for your interest rate and amortization schedule, monthly payment and any potential savings you may realize by paying points up front.
Moreover, a reputable loan originator will not hesitate to share this information with your tax consultant or financial planner so they may offer additional feedback on your behalf.
Home ownership imparts a rewarding vehicle for building wealth and a strong financial future. The mortgage consultant that you choose should be there not only when your loan closes, but should also provide you with ongoing service to assist you in managing that debt over time.
More than likely, this is one of the largest and most important financial transactions you will ever make. You might do this only four or five times in your entire life...but we do this every single day. It's your home and your future. It's our profession and our passion . We're ready to work for your best interest.
Subprime mortgages have now been credited for bankrupting well over 110 lenders and seriously damaging operations at many major mortgage firms. They've reportedly wiped out 5 hedge funds, tens of thousands of jobs, and have led to millions of foreclosures with millions more on the way. And, as if that weren't enough, subprime mortgages are also blamed for massive volatility in the stock, bond, credit, futures, and real estate markets here in the US and around the globe. Some say losses in the mortgage securities market alone could reach hundreds of billions of dollars this year.
This means that, for any Americans looking to buy, sell, or refinance a home, they are confronting a very different market from the one that existed just 6-12 months ago.
How did this happen? The recent real estate boom was fueled by a period of record home appreciation and historically low interest rates. Banks, in order to compete, loosened guidelines and began offering more funding to more borrowers through riskier, non-conforming or "exotic" mortgages.
These ideal lending conditions persisted for several years, supported by high demand, historical real estate data, home prices, and massive trading volume/profits on mortgage-backed securities and other financial instruments on Wall Street.
Then, in 2006, a slowdown in real estate led to a deterioration of home values, an increase in inventories, and ultimately to today's tightening of credit guidelines, leaving many investors unable to sell or refinance out of their existing positions. Many Americans who had tapped into their equity were suddenly tapped-out and overextended as home values fell. Foreclosures followed in record numbers and a re-valuation of mortgage bonds and other financial instruments created the credit/liquidity domino effect we're now experiencing.
Unfortunately, it's going to get a lot worse before it gets better. According to the latest estimates, over 2 million subprime and Alt-A adjustable rate mortgage (ARM) holders will face payment increases of up to 30%-100% when their loans reset in the next 2 to 18 months. These loans make up less than 40% of the total mortgage market, but the negative effects, as we have seen, of increased foreclosure activity can have a ripple effect throughout the industry and around the globe.
What does this mean to you and your mortgage?
Sellers: If you're planning on selling your home, be prepared for an even smaller pool of qualified buyers. While some experts predict a settling of this credit crisis over the coming year, tightened credit guidelines and diminishing mortgage products could knock out as many as 15%-30% of potential qualified buyers. Now is not the time to sit and wait for the best possible price. Have a serious talk with your real estate agent. Having experienced buying/selling transactions in your area, he or she can help you price your home accordingly. He or she can also help ensure that your buyers are pre-approved and stay pre-approved throughout the entire transaction.
Buyers: Get pre-approved by your mortgage professional. While there are a lot of great deals out there, getting credit is becoming tougher and tougher, and it's taking longer and longer to complete a transaction. Remember, what you qualify for today could change tomorrow in a volatile market. For those looking to refinance, keep this in mind. There is no time to delay! Communicate with your lender. Don't do anything that could negatively affect your credit, and make sure you get all your documentation in on time.
ARMs Borrowers: If your ARM is scheduled to reset in the next 2-18 months, you need to schedule an appointment with a mortgage professional right away. Whether your ARM is subprime, Alt-A, or even if you have a pre-payment penalty, don't let a default or foreclosure situation sneak up on you. Did you know that your monthly payments can increase anywhere from 30% to 100% once your loan resets? At the very least, give yourself the peace of mind of knowing what your adjusted payment will be.
Borrowers with less-than-perfect credit: Each week it seems lenders are shedding more and more mortgage products. Many lenders have stopped offering No-Doc loans and are reducing all forms of Stated-Income loans. While it might be challenging, borrowers with credit issues need to see a loan expert. Often they have credit repair resources and other strategies to help you reach your financial goals.
Finally, there's an important concept to embrace: all markets, while cyclical in nature, are self-correcting, be it credit, real estate, stocks, or bonds. For the last 6 or 7 years, real estate was booming and riding high. The correction we're experiencing now - while it seems harsh and could get much worse - is, in a sense, "natural" and directly related to the extremely loose guidelines and perhaps overzealous lending and leveraging during the boom cycle.
Is your Lender in Trouble? How Realtors can Navigate this Crisis
With some of these big lenders in trouble could mean we are in trouble. I saw this coming back in 2006 and didn't think it would manifest itself this bad until late 2008. I forgot that in the information age, bad news travels in nanoseconds. A crisis, which took 18-36 month two decades ago, is compressed into 18-36 days in the information age.
Four Steps You Can Take Today To Protect a Disruption of Business:
1- Use mortgage brokers or mortgage bankers with access to different correspondent lenders: ask them to lock with two different lenders - that means no conduits. If they don't know what conduits are, move on.
2- Pick originators who know what moves the mortgage market and rates - see of they have access to live mortgage bond pricing. If the originator replies that the Fed moves rates or that treasury bonds move rates, or doesn't have access to live mortgage bond quotes, move on. Make those that claim they have access to live mortgage bond quotes prove it to you.
3- Focus on full documentation buyers. Insist on seeing the DO or LP findings from the broker or banker if you represent a buyer or seller.
4- Have a last resort back up plan and come up with a other means of financing Be prepared for programs days before closing be discontinued, lenders days before closing or funding the mortgage halt everything. If you do not prepare for the worse then you will be left with a borrower that can not close and a seller that can not sell. Luckily for the true mortgage professionals out there this mortgage crunch should flood them our of our industry. Too many times I have to hear of horror stories of bait and switch, loans not properly prepared and getting declined days before closing, being lied too and the over stating of income on loans that borrowers should not have been in to begin with.
I am not putting down big lenders, I am just stating a fact that right now it seems the bigger the lender the higher the risk and with higher risk the harder they are falling. I have friends that work for big lenders and they are worried day to day if they still have a job. I hope we do not see anymore lenders go under, this would be nice but something tells me this will get worse before it get's better.
Loans programs that are safe today are government FHA and VA, Fannie Mae and Freddie Mac loans. Anything outside of this subprime or even ALT-A is high risk to guidelines changes with out warning.
If you are working with a client and your approval letter is older than a week, demand a new one. Last thing you or your buyer wants to do is get an offer accepted on a new home and find out after some program changes they do not qualify.
This is a crisis. Your business doesn't have to suffer if you take the correct actions.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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