The Mortgage Cicerone - The Loan Attraction Coach - Con

Why Do Loan Officers Need A Therapy Session After Every Call?

A New Post By Chris Johnson
Business Development Consultant
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(For the Observation, HT, Jeremiah Arn)

So I'm in the office yesterday (rare apperance) an I notice an utterly shocking phenomenon.  

After every single phone call that was made, all of the loan officers seemed to need therapy. 

They would get off a 3-4 minute phone call, which we could hear through the paper thin walls in our office (at least with cubicles, you have the constraint of not wanting to overwhelm others).   You'd hear EVERY WORD of the call they were on...then they'd rehash the call with at least one or two other LOs...absolutely KILLING their momentum, and disrupting the other LOs momentum as well.

Good call, bad call, indifferent, each call had a debrief afterwards.  The debrief had no value to add.  Some sort of herd mentality...that makes you feel like you're working.

"Hey Steve, I Just got off the phone with Joe Bob the Realtor, and he hasn't had a closing so far this year,"

"Really?  Joe Bob? Man, that stinks," 

"Yeah, I know it stinks, but that's how it goes."

"Yeah, he didn't have a closing.  It's what, the middle of march?"

"Yeah march madness..."

"Well, steve, Back to work."

"Alright Dave."

or..

"I Just got off the phone with the underwriter..."

or

"Man, I can't get my title back..."

Over and over.  These are good loan officers that are having these insane and value free conversations.   Over and over again debriefing one another on the call (not CALLS) they just made.   And it's not enough that THEY stop at one call, they stop someone else's progress, too.  It's an office tribal thing.  When there was a lot of business around, I'm 100% sure that this didn't happen this way, and now that there's not, our minds invent problems on the deals or calls we have...to distract us from the fact that we simply aren't working enough deals! 

We tolerate this kind of incessant updates because it's less challenging than it is to sit and focus on one thing.  It's easy to twitter, to dash off emails.  It might be a basic human need to tell stories, and it also might be a basic human need to seek sympathy.  But it doesn't mean it's productive.  We humans are also wired to seek out sugar and fat, but that doesn't serve us today.

It's hard to focus on building a business.

I'll betcha in every single case, the elimination of just a third of the unnecessary conversations in your office would earn the loan officers an extra $25,000 per year. Each.

So, let's do some thinking.

1. What are the sources of YOUR unnecessary conversations.
2. How much are they costing you?
3. What are you going to commit to in order to stop?

.....

 Also:  A Transparent (or gratuitous) Use of this Blog to promote my own Agenda:

I am starting a new site, called New Market Survival Guide.Com.  I intend for it to be a MULTI AUTHOR blog, with no more than 2 realtors, 2 originators, 2 financial planners, 2 insurance agents, 1 title agent.   I'm looking for new voices to have a space to write for 6-8 months.  If you've got something to give, PLEASE send an email to chris@chrisdoesloans.com.    You must be a PRACTICTIONER in your business that is looking to learn and teach.   If you KNOW anyone that you're recruiting to be part of this, please send 'em my way and we can put this together.  I want strong flavors and original voices.

Reprint: Original post made March 26, 2008

Doing Business The Right Way | Self Righteousness

A New Post By Chris Johnson
Business Development Consultant
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One of the things that we flatter ourselves with is that we are the ones that are doing business the right way.  The 2.0 Transparent “permission” based ways are the ones to go with, and that even further, we are on the enlightened and correct path.  There is a certain arrogance and even a self righteousness to many practitioners in the current environment.  The truth is: Web 2.0 is one way to do things.  It’s probably the direction that things are headed, but I think that mastering 2.0 skills right now is just a bet.  It’s not the end-all be-all.  It’s a bet that the current game is headed in this direction.

Somewhere on the way from blogging for business and advocacy came something else.  I don’t know what happened, but it became a given that the only people that were going to be around in the future were today’s Bloggers.  Then I talked to someone who BARELY functions on email.  I’ve known him for a while, and just did my normal “Reach out to Cool People,”thing.

The broker has a two person shop.  He is STILL generating repeat and referral business from people my age.  His core is attorneys that do chapter 13 bankruptcy buyouts in Ohio.   He declined to have his name mentioned in the blog–(because he didn’t understand blogs).  Dude will do 220-250 loans this year, at an average fee of $4500/pop.  His clients adore him.  He has an office and two processors, and he sends his mail out every month, and does everything on pen and paper. 

He uses an ancient Dell Laptop that boots into Windows 98.

He’s never been to a blog.  Doesn’t understand why anyone would do that.  He’s 56 years old.

He knows how to follow the St. Louis Cardinals,

He has 2 assistants that have never been to a blog.

When you google him, he barely shows up.   

His clients love him.

His business is growing.

And, this guy grew his business 21% in the bloodbath that was 2007 (by delegating more, and reducing his product offerings–he does FHA and Conforming, doesn’t mess with construction loans anymore).

He is charging more than I want to charge, but he’s doing things that genuinely help people.  He’s doing things openly ethically and honestly, even within his niche.  20 loans * 4500 = 90k/month.  Not a joke.

He’s doing business the “push” way, and I can count on one hand, the people that I believe will do 1mm this year in fee income of any kind. 

He finds his clients, they don’t find him. 

So let’s get real clear on an idea:  2.0 is a preference.  It’s a good way to do business, but far from the only way.  And probably, not the best way for the next few years.  It’s a tool to have in your toolbox–a spoke in your wheel.  It’s a skill to learn so you become an authority/expert on something, but it’s not the only way to do something.   

What he does right is know his products inside and out.  He communicates with customers.  He is prepared, and he does care.   You can’t streamline or wigetize any of that.  You can’t do any better than he does, and that’s why he kicks ass.  Nothing is automated, it’s all high touch, and he’s the one touching everything. 

So…

Let’s LOSE the self righteousness when it comes to ‘push vs. pull’ marketing.  It’s one way–and far from the only way–to do things.  There is nothing wrong with finding clients.  There is nothing wrong with offering your services to people that didn’t understand the need.  In fact–the happiest client I’ve ever had was a family that answered the door when I knocked (as a Realtor).   They got a home when they didn’t have one, and they loved me.  They simply did not know that they’d be able to buy.  Now–one would scoff at someone who would door knock, but then clients wouldn’t get helped..  I door knocked because it got me in front of people every day.  Guaranteed that I’d talk to 40-50 people…and whatever aggravation I brought on the world, I know was absorbed by the MANY people that got to become homeowners, and live the dream that they have always had. 

Let’s lose that.  Let’s embrace new stuff, honor old stuff, lose the ego and figure out the best path to cash.

If art doesn't seem dangerous for the artist, it probably isn't relevant.

This quote was from Scott Adams and his most excellent blog.

I’m thinking about this mostly because our industry right now has such a ferocious pull towards frightened, homogeneous, soul crushing mediocrity.   All the risk takers and mavericks are being rounded up and shot.  That’s the part I’m missing.   The mavericks, the balls out winners.  The people that rolled their sleeves up and got dirty.  Maybe a little too dirty, but the lack of creativity, effort and synapse firing is a shame.

I’ll call it the spirit of ‘76 SISA.   “No Income?  Heh.  Screw Income, We’ll Make a Mortgage.”   What went along with the rule pushing and bending was also an attitude of adaptability, when focused correctly was among the best spirit of entrepreneurship that America has to offer.   No dobut, there was a reason to change the bathwater.  But let’s not pitch a baby out there. 

“Rules, they are for other people".

I’m not trying to say that we need to go back to Max Fees, but we do need to show a little more adaptability and versatility.   We need to find ways to get deals done, and not feel like we have to bear the sins of the millions of sales punks that came before us. 

It’s time to reach between our legs, pull our tails out, and go do what it is that we’re supposed to do. 

Todd describes the idea of being a loan officer as “not just a job.”

So if it’s who we are, we have a choice.  Are we going to face the danger, hold our heads up, and kick ass?   Or are we going to sit around clucking about how we never originated an option arm and how we’re not “one of those people.”

I used to take great lengths to obscure the fact that I was a mortgage broker—the phrase, “correspondent lender,” rolled off my lips to avoid rejection.   Screw that.    We’re brokers.  We get deals done, on time, every time.  We work shoulder to shoulder with consumers and appraisers and realtors to help people.   The schmucks have all gone back to bartending and selling cars.   It’s now our time.   Let’s get a little dangerous.

Is Your Business In Danger of Instant Obsolessence?

A New Post By Chris Johnson
Business Development Consultant
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If you are only getting business one way, your business is probably unhealthy.  There are tons of originators that were left holding the bag when subprime collapsed.  People who had their cars repossessed, who have no clue how to survive the rules of the new game.  That was completely avoidable with even a LITTLE bit of diversification.

Big bluechip, "stable" companies die all the time.  Bear Stearns is the latest, but they were preceded by  Lucent, MCI/WorldCom, Enron, and many, many more.  We see a ton of human interest stories about how retirements are wiped out when the employees had too much of their earnings in employee stock plans, and how nobody saw the death of that company. 

Deal is, when you have all of your eggs in one basket you don't control, you could be toast.

Direct Mail Could dry up, social networking could be toast, your prospecting scripts could become obsolete, the Refi Market could die, Financial Planners could all launch their own in house lending solutions. 

To have a stable income and successful business, you must have a minimum of 10 sources of leads you can go back to, and more.  I have compiled a list of 129 distinct, radically different and relatively predictable places where an originator can get business.   Some require long term commitment and expertise (working with attorneys on Chapter 13 buyouts), and some don't (calling Realtors to troll for purchase business).

So here is a partial list of things you can be doing to get business; not everything will work for you, but you need to think outside the box, and outside your comfort zone if you have less than ten things you're doing to get business.

• Calling Realtors (prospecting)
• Direct Mail
• Opt In Email Campaigns
• Lunch and Learns
• Calling ARM resets
• Working Internet Leads
• Networking groups (rotari, BNI, AmSpirit)
• Getting involved with School Districts
• Print advertising
• Craig's List
• Incredible customer service (Referrals)
• Calling other brokers/bankers for turndowns.
• Door Knocking
• Apartment Complex Marketing
• Event sponsorship
• Working Relo Buyers
• Construction/Builder Business.
• Database Marketing...
• Abandoned File Marketing

...etc. 

The point is, people can get by as leveraged people for some (sometimes long) period of time, but they can't survive long term.  If you have a method that is really working, don't abandon it--do it with vigor and gusto.   Exlpoit it, but grow your business.  Make it a pattern, a system, and step outside of your comfort zone.  Commit to trying a new method for getting business every month, acquire new skills and try new things.

A rule of thumb:  If you have 30% of your business from the same source...you need to diversify.

Familiarity, Contempt and Real Estate Agent Presentations.

A New Post By Chris Johnson
Founder, Loan Officer Survival Training
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One of the GIGANTIC mistakes many loan officers make is to think that they need to do an hour presentation to get Realtor business.  In most cases, that's just dead wrong.  Does not need to happen.

Trained and paid professional speakers, world class ones, rarely go past an hour without a break.   They just can't sustain the excitement and enthusiasm that long.  So why the hell would we think we're any different as loan officers?   

The goal of a Realtor presentation is to do what?

Get the next deal that the Realtor has.   It's not to prove that we're experts, it's not to share information, it's to GET THE NEXT $%^&* deal.   Get it?   So, what's more compelling?  15 urgent minutes, or hours of meandering logorrhea?   I think you guys know the answer to that.  

So, when you present over the phone or in person, have a timer.

Ask agents questions.

Get them to talk.

Ask for a deal.

Get them info (like testimonials) in advance. 

Don't sit around brain vomiting every deal you have, program you have, that won't help anyone.  Do them a favor, kill your ego, and keep it brief.  That way you can schedule presentations 3 an hour...and get deals every time.

Oh, yeah.  If you want to really learn this, I'm teaching Realtor Presentations at 12:30 EST today.  To get the whole thing, the specific questions, and how to conduct over the phone (OTP) presentations that get deals for July? 

All you gotta do is join me.   Any program signup gets you in, and the $799 package = 15 months + a free flip cam for recording your progress (and your testimonials).  Oh, yeah. and I do a 'double your money back,' deal.  If you do the homework, which is 1 hour a week, and don't gain closings?  You get double your money back.

See you soon.

Have fun, survive and thrive.

Jackass Proof Your Business.

A New Post By Chris Johnson
Business Development Consultant
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I hate Real Estate jackasses.

You know the types, some party to some transaction that hijacks everything, tries to twist everything.  These people renegotiate after the deal is decided...with equal parts threat, greed, ignorance and malice?  

Jackasses and fraudsters are why our industry is where it is.  And I've had enough.  In December of last year, a customer was referred to me that was upside down on 6 properties he bought in Phoenix and Florida.   He had bought them in...wait for it...fall of 2005.  They were sitting unrented, and the total equity loss that he had was over 75,000 per property.   He had a stable job, and was looking forward to retirement in a few months.  This made the guy nervous, and he wanted to punish everyone around him.

Specifically, he wanted me to refinance them with 18 month old appraisals, for little to no fees and a 6% rate.  He walked me down the path really slowly, refusing to answer my questions.   He was a jackass, he caused this mess, and wanted someone to clean it up.

When I wanted to verify something, I had to do it  on my own.  He was familiar with the process, and trying to get me on the hook for making loans without knowing anything, as if a loan in Jan of 08 was gonna close without an appraisal.  I was sucked in to the 1.4mm in business that he had to offer, but spider-sense was definitely tingling. 

And when he called my cell phone 14 times before 9:30 am on a Saturday, I told him that I was done speaking with him, and I will send the notice of denial out, and that I will contact law enforcement if he called again.  I got one 'nasty email,' from him that impugned my character, but I was free.  And that was the last Real Estate Jackass I ever dealt with.

What are the signs of a Real Estate Jackass?

1. They overstep your boundaries.  They call you at home, on the weekends, at numbers you didn't expect for them to call you.  They call you day and night, all the time, and feel nothing about making demands of you.
2. They trickle information in to you.  This guy was well coached, he first asked about loan parameters, and interrupted me.  He kept me on the phone, committing me to say yes to an increasingly bad scenario, unraveling one detail at a time. 
3. They remember every nuance of what you said, and hold you to every detail (without keeping theirs).
4. They first call your work number, leave a message that says 'call me,' with no information.  Then they call your cell.  then they check back at both numbers, not always leaving messages.
5. They renegotiate after the fact when the leverage shifts to them (A buyer at the last minute who demands an inspection credit).
6. Wanting you to give first. "Just take a beating on this first deal then I'll give you ALL my business."

Honor has been missing from this industry for years.  Jackasses abound.

What do you do with a jackass?

1. Reserve the 'walk away' option in all things that you do.  At any point in a transaction if you see the signs and your intuition tells you that you're going to be paying out the nose for dealing with this guy, reserve that.  I carve it out in my initial presentation saying that I personally end my relationship with any customer that makes me uncomfortable.
2. Charge More.  Seriously.  Jackasses abound, and what you have to do is without appology tax them for their behavior.  If you've got the 'Win Win or No Deal' ethos summarized in #1, it will be fine.
3. Don't Get Emotional.  We're here to facilitate transactions, not to go to war over a leaky pipe somewhere.  We want to stay reasonable, even in the face of stupidity.  Jackasses will try to pull you into insanity with emotion.

Now, to totally jackass proof your business, you gotta be working with a good variety of clients.  When you're not prospecting, marketing and taking in tons of clients, you're subject to the whims of Jackasses.    Sometimes, you have to deal with those idiots to pay the mortgage.  In order to fully jackass proof your business, you have to give yourself options and outs.

Massive amounts of prospecting and marketing keep you Jacaksass Proof.

When you do your marketing,  you'll also be less likely to encounter jackasses because you'll exude the strength and confidence that comes from being a top caliber person.  Jackasses feast on everyone they think that they can...so give yourself options to NOT work with jackasses.

Chris Johnson has a program for getting enough business to avoid Jackasses at http://loanofficersurvivaltraining.com.

Pricing...How Do You Do It?

A New Post By Chris Johnson
Business Survival Consultant
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One of the things that's lost in the great YSP debate is the idea of pricing.  How do you price your loans?  There are at least 5 ways I can think of that loans get priced:

1. Opportunistically: You squeeze every dime you can out of people, every time.  This is the "as much as you can get away with," model.
2. Haphazzardly: Similar to #1, but less intelligent about it.
3. Flat Price:  One broker I know charges $4500 per conventional loan and $6,000 per government loan.  He's booming.
4. % of loan amount.   Pretty straight forward.  MAny do things that are based on a percentage of loan amount. (2 out the front, 2 out the rear)
5. Per Work Involved: This is how I price; I do things based on a fee schedule, with modifiers on the loan.

However you price, we want to have a real business.  We want to make sure we're doing everything on purpose, and with the customers best interests at heart.  A rookie originator is worth less than a Mike Mueller is ever going to be (but they often charge more).  I can kick the teeth of any bank in any time I want to, that's the broker advantage...that still exists.  

So I'll tell you how I price loans currently, and I'm looking for feedback of the great cicerones, and those following us.

Minimum: $2,250 in total revenue (I'm on something like a yours-mine-ours with my company).  I will occasionally do a deal for a cooperative home buyer for less, but rarely.  Since I instituted this in July of 2007, I've only come under the wire one time.

Maximum: 4.5% of the loan amount, unless it's a small loan, then it's subject to minimums.

• Basic pricing for a vanilla purchase = 1.5% of loan amount, subject to the minimum pricing.  (Ohio still has its share of $95k houses that are not huts on the river.  Middle America rocks for affordability).  I also add a $425.00 junk fee for processing and paying for the expense that has become the credit bureau. 
• Basic Pricing for a vanilla Refi= 1.875% of the loan amount.  Usually refis take longer, and stress the system out more.  So I charge more.

Now the positive  modifiers:

• If it's for someone who has referred me business: $1,000 in the customers favor, subject to minimum pricing.
• If it's someone that gets their docs to me within 48 hours of request or at appointment:  $600 in the customer's favor.

Now for the negative modifiers (all adjustments are to fee)

• If either the customer or their Realtor is a jackass: .5% my way.  A jackass is clearly defined, and I'll get to that in another post.
• If the customer gets their parents/significant others/any non engaged non professional involved halfway through:  .25%-.50 depending on their level of hostility.
• Government Loans: .75% my way.
• If I have to chase docs for more than a week: .25-.5 my way.
• Investment Loans: $3,000 minimum, 1.0% my way for the first 2 loans from customer.
• If the customer tells me incorrect information: 1.5% my way, and the loan may die if it was organicly dishonest and malicious. 
• Stated, Bank Statement, 1099 or Self Employed Loans where I have to dig through a morass of paperwork: +1.0%, and I give the customer a referral to somone else.
• 911-emergency loans: .5%.  I love these loans, so I don't ding them much.
• Loans with an affiliate title company that does not get me paperwork in 72 hours: .5 (that one is for you, Diane Cipa)

This is for loans that come through my channels conventionally.  I'm experimenting with different marketing and different pricing right now, and I have no problem with big fees--especially when talking to Brian Brady.

I base everything on the amount of work I have to do, as a standard.  I've thought this through, and it seems to add up, but the real gist is that if a customer makes things easy on me, refers me business, I can work cheap.  If a customer is a nightmare, they pay for it.  The most common one I get is the customer being a Jackass and an Investor.   I absolutely love it when I'm saving a deal on a house in contract for an investor, and they try to compare my quote to the one that never closed, and make me compete against a fictional loan. 

Everything is properly disclosed, and I have a very specific spiel for each part of the process, so the customer knows how to get me to work cheaply and what I want from them.   I tell them if things happen that take time, that the loan is subject to repricing and redisclosure.  This is  how Zillow's mortgage marketplace can work for originators.  "All quotes presume that the customer can get necessary documents within 48 hours of request,"

I'm actually rethinking this,

So:

I have three questions: 

1. How Do You Price? 
2. How do you want to price,
3. How should originators price?

Oh, finally, I'm in the last days of selling Loan Officer Survival Guide for $13.50.  I offered 'em dirt cheap in May, and the response has been fabulous so there's no reason to extend my introductory offer.  So if you haven't bought it yet, you've got till Wednesday to buy it, and see what the fuss is about.

You Simply Cannot Fake Autheticity

A New Post By Chris Johnson
Business Development Consultant
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I get some criticisms about my “personality” a lot.

• I’m abrasive.
• I talk too fast.
• I bulldoze over people.
• I’m arrogant.
• I don’t listen to other people’s point of view.

To that I say (in order)

• You have stupid ideas.
• You think too slowly.
• You are a milquetoast.
• Effectiveness isn’t arrogance.
• Why would I listen to people that are repeatedly inept?

Nobody can stand anything resembling a display of ability. It makes everyone around mad, it hurts everyone’s ego. And, it draws ire and venom like nothing else. For too long I took to heart, the fears of the incompetent, and made them my own. For too long, I made the aimless and nebulous worries an excuse not to act.

It’s possible to be ridiculously good at many things. I apologized for ability, and let it atrophy. I appologized for clarity, and let it drift away. I let the attitudes of those who don’t impact me far more profoundly than I should have. Here: This graphic was passed out at our last meeting:

This is not an anomalous picture; I’m usually around half or more of the revenue; doing more than 4 others combined efforts. I’m not “raking it in, either.” I’m doing alright, but the rest of the people must be starving.

Why do I let their critiisms in? Why would I value their advice? What can they offer me? Why let them lecture me?

I’m not saying that we should not treat people without respect, but in that venue, they are no more qualified to give me advice than I am qualified to give Bill Gates advice on how to be an entrepenuer. But I have to listen, I have to validate, and I have to coddle…or else I’m an asshole.

I got a diatribe from someone about producing deals. I had to listen to this thing for ten minutes, about how my “service” wasn’t high enough. (About 70% of my deals are from referrals from Realtors, the rest, referrals from cusotmers….)

After the insinuation that I’m being dishonest (from a guy who I saw commit fraud) I interrupted: “I don’t want the business that you have, and so I won’t do the things that you do.”

The guy was looking for justification for his role in the businesss…IF he can’t outsell me, his ego requires the manufacturing of achievement-some metric where he’s better/stronger/more than me. His ego requires that he’s better at something than I am…and rather than compete with me, he does that!

It’s HARD to be uniquely valuable, uniquely insightful, authentic, productive, and different. It’s easy to swim across the grain and to swim upstream. And NOBODY ELSE wants you to do it because it’s an affront to them. Examples:

“He’s not really frugal, he’s a failure that has no money…”

“He’s getting his business because he steals…”

“He only had one idea/got lucky once” (i.e. the Mark Cuban attacks)

“Sure, he’s good at this, but I’m good at (non sequitir).”

“Nobody likes him.”

The danger of listening to (or even being around) the mediocre:

1. You become like them. You want to screw up your own life? Fine. But HOW DARE YOU OBSTRUCT PEOPLE FROM THEIR DREAMS! HOW DARE YOU, WHO WON’T TAKE A RISK, DISPENSE ADVICE ON ANYTHING?
2. You accept their standard! Look, I wanna compare myself to better people than me. I wanna reach and change, and grow in effectiveness, insight and value. How can I do that if i hang out with idiots? Sure, I can be king shit of turd mountain, but who wants that?
3. You lose the sense of never ending possibility and youth. Man, the unifying quality of the mediocre is that they are already old and set. Their goals might be to get
4. You start to self censor You have better ideas than most mediocre people. You censor the good ones.

Finally, four things to keep you from becoming medicore:

1. Look at real metrics to discern competence. If you’re a blogger, how many long term readers do you have? If you’re a salesperson, what percent of your industry does better than you or does worse?
2. Don’t let your ego lie to you. If someone out performs you, figure out why. Is it a connection they’ve made,skill or style they have?
3. Have a big damn dream. No matter what iti s, don’t settle. No matter what you’re doing, don’t lose the sense of endless possibility that goes along with having great dreams.
4. Build creativity from a base of consistency. First, crush the game that you’re playing. Then, go into blue oceans.

Setting Goals That Truly Matter: 3 Steps to Understanding Your Business.

A New Post By Chris Johnson
Business Development Survival Consultant
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Loan officers fail because they don't know some basic math about their business.  Their time gets chewed up juggling bills, trying to time closings, and the get stressed out about all kinds of things.  They hear their 'quotas,' from their management, they hear from their spouse on what needs to be in the garage.  But they don't have goals that are really connected to them and what they want.

In my new (ahem, go buy it it's only $13.50) book Loan Officer Survival Guide, the first volume is about mindset.   One of the things I learned in researching this was that LOs, by and large, didn't have any connection or understanding of their personal finances.   They had, by and large, no clue as to what they have closed, how much they have earned, how much they need to survive, and how much they need to dream.

First...plan on some Peak Experiences.

Peak Experiences are why we live.  What do you live FOR...why are you alive?   Some of them are big dreams, some small.   Some peak experiences that I've come across from LOs that are doing the homework in the book (and have given permission to share).

• Take kids to Disneyland
• Go shopping in Manhattan for Christmas (my favorite and one I appropriated as my own personal)
• Lose 15 pounds.
• Have a surprise birthday party for my wife.
• Get house payments caught up. (A loan officer has had a rolling thirty since time immemorial).

Some PE's cost, some don't.   But think of 3-5 things that you want to accomplish this year.   For those that cost money, estimate the cost--maybe do some research. So let's say the peak experiences is $7600 bucks for this year.  Got it? 

Now, we've got the first number

For the second number, we get list of ALL of our monthly expenses together.  (Ah, yes, those things).  Don't skimp or forget anything.  Don't forget about stuff like Copays (a list of about 300 things is in the book).  You'll have a rough idea.

Take your monthly expenses.  Multiply it by 12.  You've got your 'survival' budget.  Don't round down, budget off of what you actually spend, not what you intend to spend.   Let's say that the annual budget is going to be $53,000.  (You west coasters need a bigger number, but here in the Midwest, you can live like a pharaoh for $50k a year, if you don't mind scorching summers and icy winters).

Big figure, huh?  Most people are surprised by what they spend.   Add in peak experiences number.   We're at $60,600.

Now...the next step is to consider retirement (10%) and taxes (30%, average).  That's 40% of the total needed.   So 40*$60,600 = 24,200.

Add the numbers together.  So now, we need to earn $84,800

That target gets your bills + your future + your peak experiences paid for.

Now, it's pretty simple what happens next.   Figure out your last quarter's loans.  Figure out your personal gross  income per loan, on average.  NOT fee income.  If you're a banker on salary (we envy you), factor that in.    For this example, let's use $1700 per loan as a number.

Now, all you do is take $84,800/1700 and you have the number of loans you must fund to live how YOU want to live.  (In this example, it's 49.8, so 50 loans).

Divide the big # by 12.  That's your loans per month.  You should panic when that doesn't hit.

It seems basic, but out of all the loan officers I talked to, only a few had some sense of how many deals they wanted to close, and a specific number.  This was 4-5% of the 70 odd people that I spoke to.   Before you dismiss it, ask yourself a few questions:

1. How many did I close last year?
2. How many do I need to survive?
3. How many am I on pace for?
4. What is my monthly minimum?

Without "top of your head" information, you're risking not being able to make it in this business...and not being able to survive.

Transparency: Would You Be Different If Everyone Was Watching?

A New Post By Chris Johnson
Business Development Consultant
Read other posts by Chris Johnson

I was accused of being “shady” once by another Realtor.  It got to me.  I was doing the Mike Ferry thing, and calling people for listings (this was before I knew who the heck MF was).   I was calling targeted neighborhoods when I had buyers.  “I have a buyer–do you know sellers.”   I got listings out of it (because the rule of thumb: the more people you talk to, the more listings you get).  This is when I was in my mid 20’s.  Anyway, apparently someone else had talked to someone I happened to call.  It was instantly assumed that I played dirty pool.  I was the new agent in the office, and Agents (salespeople, really) are high drama types.

Faster than the Internet turned on Greg Swann, I was an outcast.

I was stealing clients, a cardinal sin in a Real Estate Office.  I had–as a new licensee–11 or 12 listings really quickly.  This was novel, and people had a target on me. 

I was also keeping my method of client acquisition secret.  I’d made some gaffes in my new arrival as a RE/MAX agent, and the non producing majority was jealous, and looking for an excuse.  I figured if I let the cat out of the bag that you could call clients and get business then everyone would do it.  I thought that me pulling a list of people to call, scrubbing it against the DNC, calling it, making friends, listing their houses and making sales was easy.  Push marketing works, kids.

Anyway, the mistrust the incident had fostered made it literally difficult for me to work in my office.  My lack of skill at handling it compounded it.  After all–how could I have made this happen if not via crooked methods?  How could I get 11 listings in my first month with a brokerage without spending any money on advertising?

That’s when I learned…

Transparency Creates Trust

A thought occurred to me: it was then hard (as it is now) to prospect for business.  I could show my methods, and people wouldn’t copy me.  Because few people would have the reserves to wade through the ‘nos’ to get to a yes.  So the offending agent, I took into my office a while later.  I said, “we had a misunderstanding, and for my part, I am sorry that I called a client you were working on–I never meant for that to happen.  I wanted to show you how I came across the number.”

Then I showed him my excel file, the calls that I’d made, and the notes that I’d taken.  He saw that my guy was just part of a list.  He didn’t have the mea culpa that I wanted, but he came to respect what I was doing to get business.  He didn’t pursue me from that point–he knew it was an honest mistake.  I invited anyone else to start hearing about what I was doing to gain business.  It wasn’t really a freak coincidence; I’d pulled a well targeted list, and was calling on people likely to close. 

So from that moment, I didn’t hide any of my methodologies, and I learned (though I didn’t have the name for it) that Transparency was really important.  Because information desires to be free, there can normally be few secrets or long term competitive advantages.  And, even if you told everyone every nuance of your business plan, a pale echo of what you’re doing is never going to threaten you.  You can’t replicate passion, soul, verve, moxie, desire, love by following a script.  As Scott Ginsberg said–there are no cover bands in the rock and roll hall of fame.