Much of mortgage brokering is about discovering when and why a client should not take any action at all, or why he or she should not be working with you at all. There will be times when the client should stick with his or her current lender or Broker.
Figure it out fast—better to lose a client in eleven minutes rather than eleven hours of work later.
Eventually all clients will return to you. Don’t be in a rush to do business; be focused on advising all callers in as unbiased a way as possible. Do the math for them on rate differences, and on prepayment penalties to leave their current lenders. Know the policies of your lender and theirs. Above all, help to protect the clients from themselves.
Are we always the correct solution for the clients? No.
Are we who a client should speak with 100 percent of the time? Yes, but again—we are not always the ones that they should work with.
It is not about forcing a transaction; this is a very bad policy.
Here is a sample of a conversation along such lines; this is a true story.
Client–Broker Conversation at 6:00 p.m. on March 31, 2016
Broker: “So you are still in the probationary zone for another 21 days?”
Client: “Yes, but my manager loves me.”
Broker: “And you have people coming over tonight to view and possibly write an offer on your place?”
Client: “Yes, my Realtor says it will be over the asking price and subject free.”
Broker: “But, if you do not make it past your probationary period, then you will not qualify for a mortgage yourself. And most likely you are also going to have to write a subject-free offer, which without guaranteed employment would be taking a massive risk. My advice is, do not sell before your probationary period ends. Either wait or go in to work tomorrow and ask if they will give you a job letter that specifically waives the probationary period.”
Client: “My Realtor is not going to be happy.”
Broker: “Let me talk to your Realtor. I know him well and have no doubt that his concern is the same as mine and that concern is for your well-being, not our own. Besides, for the Realtor, one sale commission and a bitter client is not very attractive compared to a sale commission and a purchase commission and a very happy client.”
Client: “OK, thanks for making that call for me.”
Realtor: “I am not happy. But I get it, but what are the odds? He should be OK, don’t you think?”
Broker: “I don’t think about odds. In brokering it either is or it is not (approved).”
Realtor: “Fair enough, I don’t like to cancel a listing, but I think we will cancel the showing tonight, pull the listing, and wait to relist on April 21. Better safe than sorry.”
Broker: “OK, I will advise the client accordingly.”
The Next Morning (April 1):
Client, 11:30 a.m.: “I just got laid off.”
Client, 11:45 a.m.: “This is no April Fools joke either.”
Always be thorough.
Client, 1:30 p.m.: “Already landed a new job. Let’s chat in 90 days!”
Realtor: “I heard the news, ready to relist in 91 days. Wow!”
All’s well that ends well.
After reading this—and I assure you it is a 100 percent true story—how would you feel if you had taken the application and sent the client out to write offers?
You would have pleased the Realtor, as he would have had a firm sale just a few hours later. But what have you got now? You have a preapproval that is worthless until the client gets a new job. And your failure to lay it out for the client very likely would be the end of that client relationship.
In fact, the Realtor would in the end also have been upset with you, as she referred you based on your being the expert, and she would not be able to place the client in a new home and would be partly responsible.
In fact, it is important to point out as well that this client wanted to meet me to give me his full application in person on Saturday, April 2, but I said to him, “No way, man—we can build it all right now while you are driving home from work; it’s really this simple,” and he went for it.
Did I want to take another application at 5:45 p.m.? After 12 hours in my office chair already? Nope. But it is not about what I want; it is about doing right by your referral sources and by your clients.
Had we not had that conversation at that moment, just a few hours later he would have had a firm and binding contract to sell his property (such was the nature of the Vancouver market in the spring of 2016), and the very next day he would have been in no position to qualify for a new mortgage.
Doing what is right by the client matters—100 percent of the time.