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   ARTICLE   |   From Scotsman Guide Residential Edition   |   December 2003

Avoiding the Top Ten Mistakes Made by Loan Officers

Editor’s Note: The following article is an excerpt from Blair Hanson’s book, The Step By Step Guide to Creating Real Estate Agent Relationships.  It was written to train loan officers in effective techniques for getting home loan referrals from real estate agents.  The ideas and concepts were garnered during Blair’s 15+ years in the business.  This is the final chapter to be published in your monthly Scotsman Guide.

This chapter will help you avoid the ten most common mistakes that the average loan officer makes during his/her career. Some of them we have covered already, and, therefore, we won’t spend a lot of time rehashing them.  I don’t want to give you the impression that it is even remotely possible to avoid making all of these mistakes, even after you’ve learned what they are. Better men than me have touched that hot stove. I can virtually guarantee that you will do just what I did: Dive headfirst into one of these mistakes even while knowing the water was too shallow.

Yet, maybe you are better than me. Maybe there is hope for all of us. I can already see that you are starting to develop the heart of a champion. You have learned a lot so far, and maybe I’m selling you short by saying that you’ll make some of these mistakes anyway.  If that’s the case, please accept my apologies and congratulations in advance.

The “Terrible Top Ten”

  1. Getting caught in the “Cycle of Death”  
  2. Forgetting the 1% rule
  3. Not selling P, P, and S 
  4. Failing to say “No”
  5. Over-promising, under-delivering
  6. Giving up too easily
  7. Talking too much
  8. Not keeping your house clean first 
  9. Closing and forgetting them
  10. Ignoring the people who know and trust you now

Let’s take them in reverse order.

10.  Ignoring the people who know and trust you now

In our industry, there is no better source of business than from people who know and trust you now.  The basic fact is that people do business with those they know and trust. More importantly, people refer business to those they know and trust. You will get business referred to you, but only if you ask!  Make sure that those who know and trust you now are aware of what you do and how good you are at it.

9.  Closing and forgetting them

Just as I said above, you have to give the people who know and trust you the ability to refer you to those over whom they have influence.  Yet so many loan officers neglect the most important source:  the people for whom you’ve already successfully closed a loan. 

Any good, long-term, follow-up system will include consistent and effective communication with your past clients. 

Make absolutely sure that everyone for whom you’ve ever closed a loan hears from you at least twice a year.  Each time you communicate with them, give them the opportunity to refer business to you. Make sure they know how to contact you. Are you at the same company today that you were 5 years ago? Do they know that?

8.  Not keeping your house clean first

Handle your business!  Stay on top of your pipeline. Keep your loans organized. Get them closed on time and as error free as humanly possible. Communicate with your processor, agents, and clients. Deliver the minimum level of service your clients require. But don’t make the mistake of thinking that the minimum level of service is a minimum amount of service. What you think is exceptional is only perceived as the bare minimum by your clients.  Make the commitment to get the job done!

7.  Talking too much

The bane of all salespeople: Themselves. We love to talk, don’t we? We particularly love to talk about ourselves. But ask yourself this question:  What do you do when you are sitting there listening to someone go on, and on, and on? You tune out, right? The more he/she talks, the faster you lose interest.  Take my advice: Shut up.  You’ll sell more with your mouth shut than you ever will with your mouth open.

When you have the opportunity to sit down with agents and chat, let them do the talking.  The more you let them talk, the more they’ll appreciate it. People just tend to like good listeners. So be one.  Besides, you’ll never cease to be amazed at what people will tell you if you just listen. There is no better way to gather information and ammo for your next approach than to just sit quietly, smiling and listening to what they are saying.

6.  Giving up too easily

Why do people say that good things come to those who wait? Or that winners never quit, and quitters never win?  Because it’s true!  I give you these rock-solid, etched-in-stone guarantees:

  • The top producing agents will not agree to work with you at the very first meeting.
  • The best, most loyal, and most productive agents will require the most time to earn their trust.
  • The longer and more consistently you work the system, the more successful you will be.

Stick it out. You’ll profit from it.

5.  Over-promising, under-delivering

This would be number one, if all we were talking about was how to run your business. It is the absolutely most often made mistake when closing loans. It also happens to be fatal in almost every case. Yet, it is one of the easiest to avoid.

As salespeople and loan officers, we are anxious to convince our clients that we can do the job. So we make promises, sometimes without even knowing the situation into which we are getting ourselves. Think carefully before you make a promise. You will seldom get second chances after failing to deliver.  Besides, delivering on your promises is a minimum level of service, isn’t it?

4.  Failing to say “No”

We talked about this at length. I hope I’ve made my point. Knowing when to say “no” is as important as saying “yes” at the right time. Try to avoid no-win situations:

  • Never take anyone’s fall-out or discards. It shows desperation and lack of professionalism.
  • Stay away from brand new agents when first breaking into an office. Give yourself time to establish your reputation first.
  • Never make a promise you can’t deliver. Better to say “no” and have a chance to look good, rather than setting yourself up to fail.

3.   Not selling the necessities

We are 100% clear on this one, aren’t we?

2: Forgetting the 1% rule

The 1% rule is this simple:

  • You aren’t as good as you could be.
  • You don’t know everything you need to know.
  • You can’t learn it all at once.

So just try to get 1% better every day!

And the number one most common mistake made by loan originators:

1. Getting caught in the “Cycle of Death”

You are a sales rep.  Your company doesn’t need another processor. They have plenty of those.  They hired you to sell. Get good at selling. It’s more important than getting to the top sooner rather than later.

Don’t get caught in the “Cycle of Death”. You are not the “Chief Loan Holder- Togetherer”.  When you get too busy to market, hire someone. Get the right person in your office immediately. Give him/her one purpose, one mission in life: babysitting your loans. Then, you get out there and sell.

Do not lose focus. Keep marketing. You do not have enough agents in your portfolio to last you a lifetime. Some of them will be gone next year!  Keep your target list fresh. Keep marketing to your targets. Stay visible in your market. Work hard. You will be rewarded.

Never forget rule number one:  Market or die!


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