The Power of Networking

Networking is one of the most basic and effective origination strategies.

In our personal relationships with friends and family to business relationships, networking is essential to social involvement on any level. And certainly, the ability to network is an essential ingredient to success in mortgage origination.

In an issue of M.O.M., I wrote one of my very first articles dedicated to networking entitled, “Spheres of Influence.”   Networking, then and now, is still the heart and soul of the mortgage origination business.  It is a loan officer’s most important activity and one that must be done every day.  Meeting people will not result in immediate business, but will pay off in the long run and it is essential not to get too discouraged in the beginning.

Networking is an excellent way to build a “sphere of influence,” that is, a strong customer base.  These people must recognize you as an expert in mortgage finance.  They must think of you when they consider refinancing, building, buying a new home, second home, or investment property.  Because almost everyone is a potential customer, it is sometimes more important that your customers see you as their “friend in the business.”  A person they can trust and respect enough to refer their friends to you…your spheres of influence.

My Networking Story 
When I began selling real estate I was slightly older than 21.  My sphere of influence was minimal because no one I knew owned a home or could afford to buy one.  As a result, with the help of my sales manager, I developed a four-pronged marketing strategy designed to help me become my client’s “friend in the business.  My slogan at the bottom of my business card was “your friend in the business” and inside each card was a spot for three names, or referrals.   Just for the names, I offered a small gift or a free market analysis, and if the referral became a customer, perhaps listing or selling a home through me, I offered them a referral fee, clearly a RESPA violation at the time.

My plan was divided into four spheres of influence: personal contacts, potential customers, organizational opportunities and targeted referrals.  Today, I would probably add the Internet and a Customer-for-Life component.  Once the pact was agreed on, we developed a list for each category.  Here’s what mine would’ve looked like:


  • Spouse
  • Significant other
  • Friends
  • Acquaintances
  • Relatives
  • Co-workers
  • Church members
  • Country club affiliates


  • Appraisers
  • Architects
  • Attorneys
  • Bartenders
  • Beauticians
  • Builders
  • Board members
  • Chiropractors
  • CPAs
  • City or County managers
  • Counselors
  • Choir directors
  • Doctors
  • Dentists
  • Dermatologists
  • Escrow Agents
  • Electricians
  • Fashion Consultants
  • First-time buyers
  • House cleaners
  • Hair stylists
  • Insurance agents
  • Loan officers
  • Ministers
  • Managers
  • House Movers
  • Optometrists
  • Psychologists
  • Realtors
  • Supervisors
  • Superintendents
  • Small Business Owners
  • Teachers
  • Tax Preparers

Organizational Opportunites

A wise sales professional once said, “when choosing to belong, select only causes and groups you have passion for and want to give your time to!”
Attend the meetings regularly. Approach the organization as if it was your own business and let people know you are in the real estate loan business and want to help them achieve their dreams of owning a home.

There are a number of organizational opportunities, including:

  • Association of Professional Women
  • Fraternal: Masons or Rotary Clubs
  • Welcome Wagon (In fact, now owns the entire Welcome Wagon organization)
  • Social: country club, tennis club, athletic club, runners, Parent Teachers Association (PTA), Little League, high school and college boosters, alumni organizations
  • Fundraising: arts, symphony, church and synagogue, local colleges and universities
  • National Association of Home Builders (NAHB)
  • Local Real Estate Board of Realtors, national and state associates

Target Accounts or Referral Sources

  • Previous customers
  • Surveys and focus groups

A referral is what networking is all about. It is a loan officer’s dream or recurring nightmare. A solid base of satisfied customers is our ultimate goal and this begins with one testimonial from a satisfied client. In fact, as my career marched forward, I had a notebook full of “thank you” cards and letters stuffed into a leather bound journal. I initiated each new application with a short presentation about my business and how important each person was to my career. I started each sales call with, “You will always be glad you took action with me today. I don’t believe you will find anyone who will work harder or more professionally to help you achieve your real estate dreams. I want you to think of me as ‘your friend in the business’. Friendships don’t come along everyday. I know that. That is why I have dedicated myself to earning my customer’s appreciation and respect. If I do that, I have earned a new friend. Does that make sense to you?”

Expand Your Network
In addition to supplying you with repeat business, satisfied customers are a wonderful source of new target accounts. Along these lines, with the new RESPA regulations allowing referral fees to both licensed and unlicensed individuals, you may want to offer standard referral fees to some “key” movers and shakers who have the potential of offering your name to lots of new people in the community you choose to serve. I did. In fact, when we started our brokerage business we discovered that the best source of new business came from our employees. Our “$250 Club” was the talk of the company for many of First Franklin’s early years. We developed a gold embossed “$250 Club” brochure offering a fee of $250 for any person referred to us who ultimately closed a loan at our firm. For example, for a new receptionist making less than $1,000 salary per month, this was huge. All the person had to do was fill out a card listing the potential customer’s name. We did the rest. Our experience found that this was the best way to expand our customer base. Why? Our employees and their friends and families already trusted us because their son or daughter already trusted us. Some of our early teammates earned upwards of $5,000 per year simply offering names. Inside our “250 Club” brochure we used the acronym: “REFERRALS”:

  • Repeat business
  • Employees
  • Friends
  • Earn their business
  • Relationship
  • Respect
  • Affinity
  • Last impressions last
  • Selling the invisible

This was an awesome program.  Also inside the booklet was a section called “Who Do You Know?”  In this section we simply asked them questions like:

  • Who sold you your pool?
  • Who sells you gas, tires or fixes your car?
  • Who delivers to your home?
  • Who sold you your appliances?
  • Who was your best man or maid of honor?
  • Who teaches your children?
  • Who took your family’s latest photos?
  • Who painted your home?
  • Who is your interior designer?
  • Who is your house cleaner?
  • Who watches your children?
  • Who leads your church? School? Lions Club? Kiwanis?
  • Who is expecting a new baby?
  • Who bought a new home?
  • Who owns your local Kinkos?
  • Who is on your school board?
  • Who is your family doctor? Dentist? Optometrist? Druggist?
  • Who is your lawyer? Insurance agent? CPA?
  • Who runs you local deli? Bakery? Bagel or Coffee shop?
  • Who arranges your local theatre?
  • Who appraises real estate?
  • Who sells real estate?
  • Who sells you shoes?
  • Who is your best luncheon friend?
  • Who serves you lunch?
  • Who styles your hair?
  • Who heads your bank?
  • Who does your dry cleaning?
  • Who is your florist?

The list goes on and on. Word-of-mouth, friends and relatives, belonging to organizations, and referrals, all serve to create a growing networking customer base of “friends in the business.”
If you think more broadly and deeply about networking yourself, you will figure out dozens of better ways to contact potential customers and grow your business.

A Final Thought
I recently was left speechless after I told a mortgage broker, “The first step to networking is making a good first impression. The second step is getting the service right. So find out if you have it right. Survey your clients…Ask.”
I wasn’t ready for her response. “I don’t want to do that,” she said. “I’m afraid to hear what they might think.”
A basic principle in life applies to surveying clients: even your best friends won’t tell you, but they will talk behind your back.

Make it so your new clients can talk behind your back, and that you can learn what they’re saying. Have your clients complete surveys. If you can, have them compiled by third parties. Your customers will appreciate it. They will see that you are trying to improve and it gives you another great reason to stay in contact with each of them.

  • It gives you an opportunity to sell something else or make a new offer
  • It keeps contact with your clients
  • It lets you learn from your mistakes
  • It helps you flag possible problems that can create new selling opportunities
  • It keeps you from coasting
  • It tells your customers what business you are in, and what folks are really buying.

Networking is really the oldest, simplest, and generally the most effective way to generate business. It is the best way to ensure your long term future in the lending industry.

By Bill Dallas