This article illustrates how a very unique, consumer-direct-marketing strategy, can generate more leads than you ever thought possible! It's called "Second Opinion^TM" and the strategy behind the system is that regardless if a prospect has been pre-approved for a mortgage by another lender, that you would like the chance to review the deal and give them a "second opinion". And, I'm not talking about interest rates here! By offering to look over how another lender has structured the deal, you are positioning yourself as a trusted advisor where you are setting up their mortgage, not as a one-trick-pony, but as a financial planning tool.

When you read this article, not only will we show you how it works, but provide you with the sample ad and flyers you can use to make this strategy one of the pillars of your lead generation system.

Have you ever heard this? "I've already been pre-approved for my mortgage." Most of the time, you would say, "O.K.!" and hang up!

Let's rewind the tape. "I've already been pre-approved for my mortgage."

Your answer, "That's great! However, I have found that just like when you find out you need major knee surgery, you want to get a second opinion from another doctor right? Well, a mortgage is one of the biggest financial decisions you will ever make and I specialize in giving clients a "second opinion."

Positioning yourself as a "Second Opinion" loan originator, allows you to look over your competition's approval, to see if it makes sense to restructure it. If you have seemingly "lost the deal" to someone else in the first place, you might as well become the AVIS of the mortgage business - we're #2 - but we try harder!

This is a program designed to make sure you are considered in the running regardless if they have gone to another lender and have been pre-approved.

Now, I'm not talking about rates here. What I am referring to is the structure of "the deal" itself!

Is it the right type of loan program for the client?

Should they decrease their amount of down payment and use the difference to pay off debt?

Should they decrease the amount of down payment and use the difference to set up a college fund for their children?

Should they pay points or do a no-cost loan at a higher rate?

This is a full-blown consumer-direct-marketing strategy and to illustrate how it works, here is a sample ad that can be placed in your local real estate magazines, real estate classified sections, and marketing flyers to prospects:

Here's how the ad works:

The HEADLINE is worded in a way that will attract only those people who have been pre-approved for a mortgage - but not yet closed on the deal.

The ADVERTISING COPY makes the analogy of getting a Second Opinion from a doctor, so why not a mortgage company?

The QUESTIONS they need to ask are also listed in the body of the ad. If the lender who pre-approved their loan did not ask them any of these questions, it prompts the client to get a 2^nd opinion from you.

If the client's lender did a good job and reviewed all the options with them, admit it to the prospect and tell them to go back to their original lender. Do not go after the deal just because of interest rate - your second opinion has to truly make a difference in the way the deal has been structured so the mortgage becomes a financial planning tool (and not just a loan officer who, all they have to sell, is interest rates).

You also run the danger of "educating your client" who will go back to their original lender and tell them what you have advised them. Be sure to address this right up front with this script:

"If you go back to the lender that had pre-approved you and they either agree with me or tell you that they could do the same things that I am suggesting, if I were you, I'd ask them WHY they did not mention it to you in the first place.

Four things will happen to you:

1. You will get a chance to review deals that you never would have done in the first place.



2. You will get more referrals - even if they do not end up closing their loan with you, because you were the one who educated them about it.



3. If the deal with the first loan officer somehow falls apart, you are there to help them.



4. They have already talked to someone else and it takes less of your time. Someone else has already educated them about the basics.

Hindsight is really 20/20! You not only get to view what your competition is doing, but you get to position yourself differently because all you want to do is give them a second opinion.

Second place is NOT just the 1^st loser - in the mortgage business, it's a good position to be in.

Copyright, 2004, LoanOfficerMagazine.com

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Tim Braheem is President of First Rate Financial Group and CEO of LoanToolbox.com. Tim has ranked as a top producing Loan Executive for more than a decade. He has appeared on CNNfn as an authority on the subject of mortgage market trends, and provides seminars in the United States and abroad, to motivate mortgage professionals to higher levels of success. To learn more about the topics Tim includes in www.LoanToolbox.com, send an email to timb@firstratefinancialgp.com.

(Editor's Note: In the next issue of www.LoanOfficerMagazine.com,
we have interviewed 3 loan originators who will share how each one pays their assistants.)

When it comes to hiring employees that are critical to the overall success of the company, my first rule is: Pay good money for good people. Your Personal Assistant is one of the most important people on your team. This takes an extraordinary person that is willing to go the extra mile to ensure that you are focusing on profitable activities, with optimum efficiency.

The first step in planning out the goals and compensation for your Personal Assistant is to examine your own hourly rate of pay. Take a look at your schedule, and sort out the tasks that are a time-drag to you. If you find that you have recurring activities in your calendar which are low in payoff and high in time consumption, then these things should be assigned to your Personal Assistant. By centering your attention on activities that increase your own hourly rate of pay, the overall profitability of the company will increase, and you must create a working environment composed of people who buy into this idea.

I went through this process of analyzing how to increase my hourly rate of pay a number of years ago, and concluded that activities such as dropping off dry cleaning, going to get lunch, or even getting my car washed were an enormous waste of my time. I calculated that it took about three hours each week to handle miscellaneous errands, and I would be better off if I could have someone else do these things for me.

This thought was punctuated in a conversation I had with my associate, Steve Silverman. I casually asked him if he was still getting his Cafe Americano every morning at Starbucks, and he informed me that he still indulged in his favorite beverage every day, but he no longer went to pick it up himself. Steve calculated that this was a 23-minute round trip he was making every single day, just to get a Cafe Americano at Starbucks. Multiplied by five days a week, and as an Attorney billing $450 an hour, it was costing him over $850 a week to get his own coffee.

He concluded that no type of coffee was worth that amount of money, and promptly assigned this task to his Personal Assistant. She now picks it up for him each day on her way to work, so he can start working earlier and focus immediately on more profitable activities.

I was amazed at Steve's ability to get his Personal Assistant to agree to his plan, and decided it was time for me to have a conversation about efficiency with my Personal Assistant. We discussed how my hourly rate of pay affected the company as a whole. She clearly understood the value of having me focus only on high payoff activities, and we started to sensibly delegate various tasks that would allow me to cultivate business more effectively.

My Personal Assistant has the ability to handle marketing, database management, and loan processing. She handles my daily calendar and assists me in every aspect of managing my business. At the same time, she is receptive to handling some of my personal affairs to create balance in my life. This type of synergy and support should never be overlooked when it comes to compensation. When my business skyrocketed and I doubled my production as a result of her cooperation, I gladly increased her earnings by approzimately $20,000 per year.

Do not short-change the people who are critical to your success. When you have a strong individual at your side, make sure you secure your future with that person by compensating them adequately.

Most mortgage companies pay their employees on a salary + bonus structure, which is wise because of the cyclical nature of our industry. Paying out large salaries can be detrimental to the future of your business if the market goes through gyrations and business slows down. You are then faced with lay-offs, and having to make difficult decisions that affect another person's future can be an unpleasant predicament.

I pay moderate-to-good salary to all of my people, but give them incentives. A lot of Loan Officers (and I use to be one of them), pay a base salary plus "X" amount of dollars per file. The problem with this is that it really isn't a bonus. This becomes an expected part of their compensation.

For example, if you pay your Processor $75 for each closed loan in addition to their $3,000 monthly salary, it is the same as guaranteeing that their salary will be $3,750 a month when 10 loans are funded. There is no way to take that money back. By definition this is really not a bonus; it is a glorified tiered-salary structure. Bonuses should be based subjectively upon performance. If an employee's performance is not conducive to your objective as the employer, then you should not have to pay the bonus.

Compensation for my team is based on net profits on a month-to-month basis. At the end of each month, we run a profit and loss statement. This takes everything into consideration from the overhead of running the office, telephone bills, copy expenses, toner, salaries, my personal commission split, etc. We arrive at a net profitable figure, and 35% of that is placed in the team's bonus pool. This amounts to approximately $10,000 each month and I disperse that among four people. I personally decide who gets what percentage of the bonus pool based on their performance over the past 30 days.

This has been a very successful formula for me and has allowed my staff to make money well beyond their salaries. More importantly, they know their bonuses are based on performance. I have them tied into the bigger picture, and everyone on my team has the same objective, which is to create raving fans of our clients. The more we do that, the more volume we do on a monthly basis, and the larger the bonus pool becomes.

Remember, in the old formula you cannot take $75 per file away. If the individual does a mediocre job, you still owe them the $75 you promised them. In the formula I just described, the team is driven to a common goal.

Copyright, 2004, LoanOfficerMagazine.com

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The April Mortgage Marketing Minder^TM contains a suggestion for marketing to your BEST clients (April 5^th) and your CPA clients (April 15^th). Both ideas are timely, clever, and you don't have to spend a whole lot of money. Even if you don't have a database of CPA referrals, be sure to send a Survival Pak to your OWN CPA!

April 5^th:

Client Letter with $1 Lottery Ticket Enclosed -
Send this short letter to your BEST clients:

April 15^th:

It's tax day, and CPA's will be in the office from 6AM until midnight.

We recommend that you deliver a Survival Pak to your CPA affinity partners sometime during the day on April 15^th. You can put together anything you like, but here are some ideas for you.

• Frappuccino or a "caffeinated-type" drink
• Candy Bars
  (Nestles "Crunch" Bar - because it's crunch time)
• Fruit
• Popcorn
• Cheese Sticks
• Crakers
• Cookies
• Life Savers
  
  
• Pencils
• Pencil sharpener (like used in grade school)

And, if you really want to add something special,
include a plastic visor thru the Oriental Trading Company,
where you can purchase 12 of them for only $6.95.

Include your business card and a short note thanking them for their business, and you were thinking about them on their biggest day of the year! Maybe this would be a good time to ask for home equity loan referrals - for clients who owe the IRS some big bucks.

Copyright, 2004, LoanOfficerMagazine.com

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The real estate community's mantra about how the value of a property is determined has always been:

However, the National Association of Realtors recently published a study about other characteristics of the house itself that can either add - or detract - from the value of the home. As a loan originator, it's extremely important that you understand how much value an extra bathroom or central air conditioning adds to the value. If not for the sake of your clients, for information you can pass on to your real estate agent partners and your appraisers.

As a subscriber to this magazine, SUBSCRIBE NOW, you have the ability to print a chart that can be used to distribute to your clients (include in a client newsletter or give to prospects as an added-value when you meet with them). Send a copy of the chart and the article to your real estate agents. While this is available to Realtors^TM, I would bet you my first-born child that they have not read it. While values are different in various areas of the country, give a copy of this to your appraisers too.

Here's the article.

A home is made up of a number of attributes that determine its value or selling price. Because all properties are unique in any number of ways, determining how all of the physical and locational characteristics affect the value of a home can be difficult. Recent research provides some insight into which characteristics add or detract from a home’s value. A new study supported by NAR’s National Center for Real Estate Research measures how different physical attributes of a home can influence the value, and therefore, the selling price of a home. The Value of Housing Characteristics by G. Stacy Sirmans and David A. Macpherson of Florida State University examines specific property attributes such as size, number of bedrooms and bathrooms, and height of ceilings and how each of these increases the actual selling (not listing) price of a home. The Study This study uses data encompassing more than 28,800 residential property sales from 21 counties in the Philadelphia area (TreND MLS) over the period 1996 through the first quarter of 2003. The authors used a statistical analysis method called hedonic regression to disentangle the relative effects of property characteristics on a home’s selling price. The study also examines how these characteristics differentially affect selling price across several counties. Major Findings The results of the study generally are consistent with the conclusions of earlier research done in this area, although this analysis provides a far greater level of detail. Larger homes and homes with more bedrooms and bathrooms tend to sell for more, even after controlling for other physical, locational and quality features. More importantly, the study also provides estimates on how much more (or less) homes with particular characteristics can be expected to sell for. Items that tend to increase the selling price of a home include central air conditioning, basements, 9-foot ceilings, fireplaces, garages, and bathrooms. In fact, the study found that bathrooms have a huge impact on selling price, with each full bath adding about 24 percent. Internal features that add the most value include a family room, a dining room, a whirlpool, and a security system. Among the other findings of the study: A basement increases the value of a home by nine percent. Nine-foot ceilings add about six percent to the price. Cathedral ceilings add 2.4 percent to the price. Each additional 1,000 square feet of living space increases the selling price by about 3.3 percent. While an in-ground swimming pool adds eight percent to the selling price, an above-ground pool adds no value. A fireplace adds 12 percent to the selling price of a home. Each additional fireplace adds approximately 10 to 16 percent. Some location characteristics add to the selling price of a home. Close proximity to golf adds about eight percent to the selling price. Any location on water, or with a water view, adds value. The study also found that certain attributes actually detract from a home’s selling price. Houses with vinyl and aluminum exteriors sell for about four percent less than those with brick. Houses with flat roofs sell for around 10 percent less than those with pitched roofs. Houses advertised as fixer-uppers sell, on average, for 24 percent less than other houses. While a basement laundry decreases the selling price of a home by 2 percent, a home with no laundry sells for 15 percent less. Important for RealtorTM Homeowners invest a significant amount in their homes. The Census Bureau reports that homeowners spent $121.5 billion in 2002 on maintenance, repairs and improvements to owner-occupied properties. Nearly 60 percent of that total was for additions and alterations to the home or property. Determining how different attributes of a home affect its value is important when selling or buying a home, as well as in the financing (or refinancing) or the home. Homeowners must be keenly aware of the trade-offs when making remodeling decisions, especially if those renovations are done in anticipation of selling. NAR’s most recent profile of homebuyers and sellers shows that 25 percent of sellers most want their real estate professional to help them price their home competitively. Seven percent want their agent to tell them how to fix up their home and sell it for more money. Being able to determine which attributes of a home add or detract value is a useful tool for REALTORSTM in developing a marketing plan for selling a home.

For a downloadable version of the above report, for you to use with your clients, Click Here.

Copyright, 2004, LoanOfficerMagazine.com
Used With Permission of the National Association of Realtors^TM

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