|
How to Thrive in the New Economyby Art Appelberg, Founder, President and Principal Broker of Northwood Mortgage The best things in life are free (most people can only think of a couple)—everything else costs money. Get used to it! Now is the time to make some. Current Environment There are recent statements by the Bank of Canada that the recession has ended. Don’t count on it. In order to thrive in this new economy, it will be necessary to outperform other mortgage industry players. Those who adapt will emerge from this recession far ahead of their competitors. This will not be accomplished by continuing in the same old ways. Thoughtful approaches are necessary. David & Goliath (Us vs. the Banks) The way I see it, the major competitor of Mortgage Agents is the front door of the Bank. In order to reach our clients we must first get their attention. Once this is accomplished, the mortgage brokerage community is certainly able to match the service levels of the branches. Our agents are far more motivated and always will be for the obvious reasons. The banks try to be all things to all people. As a result they cannot focus the way mortgage agents do in providing a higher level of service in their specific area of expertise. What is needed is the highest degree of cooperation between the brokerage house and its mortgage agents. Without this cooperation most mortgage agents will flounder. Professional Community Work for yourself, not by yourself! A brokerage house that provides sharing of ideas and group support allows the agent to learn from fellow agents. Sharing of ideas such as sales techniques from successful agents will allow others to learn how to emulate that success. Diversification and Full Service Obviously it takes a lot of effort to acquire a potential client. Once one is found, a mortgage agent will want to have available whatever the client may need in the way of mortgage products or accessories. In order to maximize profitability, all sales opportunities must be realized. It makes sense that the mortgage agent should have ready access to a high degree of expertise in the following areas: Maximum discounted rates, In order to meet the needs of the mortgage agent, a brokerage house should have all of the expertise required readily available to its agents. For agents to excel, it is well advised that they align themselves with a full service brokerage house that will maximize their success in meeting their clients’ needs. The inability of an agent to handle commercial or multi-residential mortgages can result in the loss of thousands of dollars of potential profits for each mortgage agent each and every year. A brokerage house should have on-site experts in each of the above named areas with the ability to handle the more difficult situations for the mortgage agent. I feel strongly that our clients should carefully consider life insurance and other protective measures for their family when they are entering into a large debt. Should some unfortunate incident befall one of the borrowers, the other may find it difficult or impossible to make ends meet thereby being forced to give up their home. We as mortgage agents may have a fiduciary responsibility to discuss this topic with our clients, especially when the lenders are referring to creditor insurance in their commitments. Mortgage agents who provide these kinds of services should be able to profit from them. Are you maximizing your revenue streams? Mortgage Banking The ability of a mortgage brokerage to enhance their close ratios is further enhanced by mortgage banking. This is the capability of the brokerage to provide its own funds to close difficult deals where it is believed that merit exists. This may include top up money just over the threshold of the “A Lenders”. This ability will substantially increase the wealth of the mortgage agent by increasing the number of deals that will close. Deal Placement Another area to consider is professional deal placement. More and more, lenders are looking for higher close ratios and efficiency. The lenders will cut off agents who provide too many deals that do not close. Your brokerage house should be capable of providing solid expertise and advice to you in deal placement. Every lender has a niche product that will suit a particular loan that other lenders may not care for. A professional deal placement officer will be able to determine this for the mortgage agent. Why does every agent in the house have to know every lending policy of each lender? It makes far more sense to have experts in these areas who assist with placement and share knowledge. That way the mortgage agent can spend time where it most counts–Getting the attention of prospective borrowers. Moral Support The amount of the brokerage fee is often a difficult issue for the mortgage agent. Should there be a fee or not and if so, how much should it be. Your brokerage house should offer strong guidance and have clear policies in this area. They should be readily available to suggest and justify any fees being charged on a file. This may sound trivial but it is often one of the most difficult areas for a mortgage agent to gain any level of comfort with. If a mortgage agent is to thrive in this difficult economy it will be necessary for them to come to grips with this issue. A strong supportive environment will mean the difference between success and failure in this area. Support Systems Mortgage agents should align themselves with a brokerage house that offers both mortgage product and sales training. Mortgage agents should have access to a steady stream of lenders and product. If this is not readily available to you, you will fall far behind the successful industry players. Compliance The new Mortgage Brokers Act requires new types of disclosures that mortgage agents need to be familiar with for example, Suitability of the mortgage for the borrower as well as Suitability of the mortgage for the private investor. Your brokerage house should be ensuring that you comply with the regulations of the Act by providing the necessary tools, training and reviews. Advertising One of the easiest and most successful ways to get the attention of prospective clients is to be involved in a comprehensive advertising program. Many argue that this is too expensive for the average mortgage agent. They are correct! Your brokerage house should offer sharing of advertising leads in order to maximize the success of the group. This alone will separate the “men from the boys”. Working as a group in this area will help to ensure your success. Success The secret of success without hard work is still a secret! Align yourself with a strong and successful brokerage house and you will substantially improve your chances of success. Art Appelberg is the President and Principal Broker of Northwood Mortgage which he founded in 1990. He is also a partner in Northwood Mortgage Life and the President of Northwood Mortgage Investment Corporation. Lic. # 10349 |
