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Mortgage Broker News | 31 Jan 2013, 12:00 AM Agree 0
Buying down rates is a race to the bottom, writes broker and trainer Greg Williamson, laying out his plan for swimming against that tide
  • Chris Richards - Mortgage Intelligence | 01 Feb 2013, 08:22 AM Agree 0
    "Of course, the easier road is to just buy-down rates and race to the bottom with everyone else. The scary part is what if I win the race to the bottom? "

    Absolutely don't want to go there and it PAINS me to see it happening.

    The formula for success is simple as I see it... Attract > Convert > Close > Delight

    As we move strangers down the funnel, at every junction we have the opportunity to **improve the conversion rate** by adding value to the process, as Greg suggests. If it used to be 10 applications from 30 contacts, what can I do to get 12 applications per 30 contacts? If I can convert and close 6 of my applications into mortgages, what can I do to close 7? If I get 100 bps on average, how can I get 105?

    Knowing your baseline (conversion rates) is hugely important ->, because if you don't generate enough leads OR improve your conversion rates, the income you are hoping for will NEVER show up. And note that DELIGHT means your clients care about you, that they are your fans, and that they will refer you, which means your lead to application to closing ratios just got stronger.

    Sending a message to mortgage lenders that we are willing to work for peanuts, is big cause for mortgage industry concern. And I'm not interested in a pay cut.
  • Ron Butler | 01 Feb 2013, 09:29 AM Agree 0
    Greg is right, discounting rates is not for small teams and individual brokers.

    We discount a ton and in order to do it we had to tear apart our operation and rebuild it in a way that is totally different than what almost any other brokerage looks like. We are still tweaking it and likely we will be refining it for years to come.

    The single most important thing to understand about rate sites and rate discounting is no mortgage broker gets to decide whether it will continue or not. Only the public will decide whether it works or not.

    Do full commission stock brokers get a vote on the discount stock brokerages operated by the banks and others? Do travel agents decide the fate of Expedia and Priceline? Does Yellow Pages call the shot on Google?

    There will ALWAYS be a full service, full price mortgage broker. Chris sums it up perfectly: "Delight the client" and it will come back to you in spades. What is being missed here is what all the lenders know: the public will decide what mortgage vendor they want not mortgage brokers.
  • Find another job while you still can | 01 Feb 2013, 12:01 PM Agree 0
    From a broker's standpoint, this make sense. Unfortunately, the broker ship is taking on water too fast to plug the holes.
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