Practise Management

So your client has been pre-approved? Now what?

Some time back, a Mortgage Broker friend of mine was frustrated as his business lodged around $20m in Approvals-in-Principles (AIPs) in a year, yet only around $4m resulted in actual settlements. A lot of work for little financial reward given a 20% conversion.

He asked me what I do once a client has been AIP’d and whether I experienced a similar statistic.

My first comment was “we get paid on settlements, not lodgements”. As obvious as that sounds, many brokers focus on the wrong levers.

Naturally the client has to buy a property for the loan to settle, therefore you should implement a diligent follow up process to ensure you’re not working hard for little financial reward.

Here’s what I recommend you do.

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Setting up a customer-focused business for success

Ask any successful mortgage broker on the MPA Top 100 list, and most of them will say that the majority of their business is generated from referrals. 

Referrals and word-of-mouth marketing form the backbone of most mortgage broking businesses. 

Which makes a mockery of why regulators and Royal Commissions cannot get their heads around commissions and the conflict of interest issue.  Why is it that the mortgage broker share keeps increasing?  At the most recent MFAA report, the market share for mortgage broker sourced mortgages has increased to 59.7%. 

The reality is that mortgage brokers only become successful if they focus on the customer.  There may be inherent conflicts of interest or commissions from some lenders that are higher than others, but if the broker wants to become successful, they must put their customers first.  And when that happens, those mortgage brokers will generate more referrals and repeat business.

The corollary is that those same referrals ensures that the customer’s best interests are looked after first.  Because if those same customers are not looked after, they will not be giving referrals to you.

And on the evidence of things, more customers are seeking mortgages from mortgage brokers.

As a mortgage broker, how do you set up your business for referrals and repeat business?  Here are my top 3 tips.

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My top 3 issues to focus on

Last year, Niik Stewart (coach to celebrities, executives, and businesses) was training at my gym and approached me:


“Mario, you’re a positive successful guy in the mortgage game. Today I’m presenting to around 200 brokers hosted by The Adviser New Broker Academy.

What would you say to the room are your top 3 most important issues to focus on in order to succeed in the mortgage game?”

Here’s what immediately sprung to mind:

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Sense of Urgency

Time is your most precious resource –
Photo by Sonja Langford on Unsplash

The 3 most powerful words when it comes to closing a deal.

Have you found that some (or many) of your prospects will fluff around when it comes to making a decision and moving forward?

Many brokers seem to also fluff around when it comes to closing the sale. They provide a stream of ongoing valuable advice to their prospects (by keeping in touch), to later find that the business slipped through their fingers.

This not only demotivates you but wastes your valuable time. And as you know, time is the most valuable resource which you can never get back.

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Prepare your mortgage business for the new financial year

Prepare your mortgage business for the new financial year

 

With the new financial year just started, this is a great opportunity to step back and review how you are tracking with your business.  It is so easy to roll straight into the new financial year and continue chugging along.

With new lender policies and product changes, a shift in the real estate market, the new comprehensive credit reporting system starting, and new technology coming online –  will your business be able to cope with these changes and thrive?

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Who would be a mortgage broker today?

 

 

Being a mortgage broker can be a noble calling.  But in today’s topsy-turvy world of rapid change don’t lose your sense of purpose.

The rate of change in the mortgage broking environment today is probably the most turbulent it has ever been.

Criticism, whether ill-informed or mis-directed by self-interest groups, media and regulators, a remuneration review, and lender policy changes all contribute to the confusion and frustrations with being a mortgage broker today.

And I can sympathise if you didn’t leap out of bed today to rush to your desk.

The struggle to get that deal over the line, negotiating with credit assessors who may not be up to speed with their own credit policies, moving goal posts, or simply the grind of the whole process.

And this is where you can rediscover your sense of purpose.  The sense of purpose that got you to start your mortgage broking business in the first place.

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What I learnt about how to be a successful mortgage broker

 

Learning to become a successful mortgage broker

 

When I first started my business, it was a difficult time.  It was difficult to see how to get leads, referrals and customers.  In fact, starting a mortgage business was one of the most difficult things I have ever done.

How do you propel your business to the next level?  What are the successful brokers doing?  What are they doing that is different and better than you?  What did they do to get to where they are?

Here are some of my tips to help you become successful:

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Should you outsource your blog?

Write your own blogs to build your credibility

 

We get this question (or similar) from new brokers when they start their business.  As we get to the subject of what forms of marketing are they doing, they invariably ask us this question.

Should a new broker starting their new finance business get someone to write their marketing blogs or newsletters?

Could they purchase a newsletter service – where they send newsletters to your contacts/clients on your behalf?

Those businesses do exist, and certainly for some businesses it can be successful for them.  From our point of view, we certainly do not recommend this to a new mortgage broker for a number of reasons.

One of the first things to note here is that we do not outsource our content.

All our articles are original, and we write them ourselves.  And we certainly recommend our brokers do the same thing.

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What are the most important pieces of advice for a first time finance/mortgage broker?

Mortgage Broker Mentoring Workshop

Changing careers, becoming a new business owner, in a new industry, and trying to help customers with real live problems.  Just how do you do that if you are new to the industry?  And not make a mess of that opportunity – or worse, make a mistake and ruin someone’s dream.

That was the question we wanted to answer when we first set up Masters Broker Group in 2012.  Because we wanted to make a difference to people’s lives.  Just how do you help and mentor a new to industry mortgage broker to become a high performing trusted adviser quickly and successfully, in a systematic way?

The answer to this question lies at the heart of our mentoring programs.  And we would like to think that since we started, that we have made a difference to our brokers’ lives and in turn, allowed them to help their customers achieve their own financial goals.

This month we decided to ask some of our brokers who have made that leap, and are continuing to build and grow their businesses.

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Top five reasons to call your mortgage customers

IMG_0787cTop five reasons to call your mortgage customers

At some conferences and seminars that we attend, we are surprised by the number of mortgage brokers who say that they don’t get many referrals from their existing customers (when we say many, we mean 30-40 per month).  And when we speak with them, we uncover that they have no strategy to keep in touch with their customers.

The moment you lose touch with them or start making business more about you than your customers is the time you risk becoming irrelevant.

As Tom Panos says in his podcast, Start Attracting, Stop Chasing.

Here are our top five reasons why you need make the time to call your mortgage customers regularly, and start attracting referrals.

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