Trusted Advisors Have the Competitive Advantage

Six steps for stronger customer relationships.

Most loan officers are trained to sell mortgages by quoting loan programs, rates, and fees rather than using consultative sales process. The difference between the two is more than semantics. It can mean the difference between having a short-term relationship with a customer and a long-term relationship valued at thousands of extra dollars of income to you. It can also be the difference between losing business because you look like most other loan officers and winning more business because of effectively setting yourself apart from your competition.

Have you heard of the phrase, “You’re only as good as your last loan?” This is actually a true statement for most loan originators. You are only as good as your last loan if you’re merely quoting rates and fees, working the loan until closing, then moving to the next loan. In this case, your business will live and die by what interest rates do. But it doesn’t have to be that way. You can do something that causes the above phrase to be false.

If you are serious about your mortgage business, it’s critical to become a trusted advisor or mortgage planner. Instead of just quoting rates and fees, quote total cost. Show your prospects and borrowers the long term impact of one loan vs. another. Show them what happens if they have a mortgage pre-payment plan, paying additional principle payments each month. Show them the tax benefits of each mortgage loan presented to them. Show them all of these numbers in writing by giving them a detailed loan analysis or presentation. If you do this, the phrase that will be true for you would be something like, “You’re only as good as the relationship you can build with your client.” Or, “You’re only as good as the additional services you provide above and beyond the average loan officer.” Or, “You’re only as good as the education, information, and value you add to your clients.”

Research has clearly shown that those loan officers who were consultative in their practices had significantly higher incomes than those who were product-oriented. We found that approximately 82 percent of independent mortgage loan originators earning net incomes greater than $150,000 used a consultative delivery system. Not a single advisor earning less than $75,000 used a consultative approach—100 percent of these advisors were transaction-based.

Consultative Selling Creates a Competitive Advantage
This chart shows us that out of 250,000 loan officers nationwide, only 36,470 of them have a consultative approach to their business. This is only 14.59 percent of the loan officers in the United States. You’ve probably heard that the top 20 percent of the loan officers are doing 80 percent of the business. This study proves this to be pretty accurate. It also shows that you better find a way to elevate yourself to becoming a trusted advisor to survive and thrive in the competitive mortgage origination game.

Fortunately, there is a proven process that will place all the work you do with your clients within a consultative framework. The mortgage consulting process enables you to consistently deliver a high-quality client experience that will clearly differentiate your practice from the competition.
This process is based on a series of meetings and customer touch-points:

1. The Point of Sale – You need to establish rapport, ask great questions, and listen carefully.
First impressions are critical to establishing yourself at a higher level. Beyond the obvious of having a professional image as far as dress, body language, eye contact, and being articulate, the most important factors are your knowledge, your credibility, and your caring. It’s like the old saying, “They don’t care what you know until they know you care.” So, during the first meeting or phone call you must establish trust so the prospect will want to proceed to the next step with you. You must determine the priorities and concerns of the prospect, so that you can present a mortgage plan that not only meets their needs, but provides them with strategies that create life changing impact. A trusted advisor loan originator must go beyond quoting rates and fees by showing the power of prepaying a mortgage and/or investing the savings. The most immediate strategy to differentiate you during the first meeting is to ask a few questions that demonstrate a trusted advisor approach. We recommend that you start your questioning process with: 1] Ideally, how old do you want to be when you home is paid off? 2] Based on your current situation, how old are you going to be? Not only do these questions position you as a trusted advisor, but they also create a problem for you to solve, given that most people want to have their home paid off sooner than their current situation. Now, you have created a customer experience in which you are different that other loan officers and you are sharing solutions to problems your clients didn’t even know they had. Other trusted advisor questions are: How long do you plan on living in the property? When do you plan to retire? What is the approximate value of your investment assets? These are the types of questions that show your clients that you are interested in getting them the best mortgage(s) and helps them see the big picture. This causes them to view you at a higher professional level.

2. The Presentation—make an impact by sharing life changing insights and advice.
If you have conducted a strategic first meeting or phone call, the presentation will be straightforward and well received. There are two key elements to a trusted advisors presentation. First, you must present solutions above and beyond quoting interest rate. You will cover the interest rate options, but more importantly you present life changing strategies, explain the power of prepaying a mortgage and the leverage of investing the savings of one program vs. another into an asset accumulation account. Second, you must provide your client with visual presentation of your recommendations via phone, e-mail, fax, or in person. Again, if you want guaranteed trusted advisor impact, you must present a visual presentation that clearly explains all the options and recommendations in a comprehensive format. This means giving them something more than just numbers on a legal pad. You must create professional reports that clearly spell out the impact of their mortgage decisions.

3. Your Follow Through—be proactive and reactive.
This is critical to showing that you’re on top of things and that you care about the client. Be proactive by e-mailing, faxing, or calling your borrowers and referral sources on a regular basis to keep them informed of the loan process. If you don’t personally call, have someone call on your behalf. I work with many of the most successful loan originators in the nation and their responsiveness is incredible. As busy as they are, they return phone calls because they know that’s what got them to where they are. It’s unacceptable to not return phone calls, period. It’s also required if you’re going to be viewed as a trusted advisor.

4. The Post Closing
The focus of this meeting is to make sure that all of your clients needs have been met, or
better yet exceeded. By going the extra mile after the loan has closed, you have demonstrated that you are more than just a loan officer…you are a trusted advisor.

5. Monthly Market Reports
Now it’s time to start building a long-term relationship. Doing a great job of closing the loan is just the beginning if you are a trusted advisor. We recommend sending a monthly newsletter and a proactive statement that keeps your client up-to-date on interest rates. It is important that your clients always have a detailed understanding of how their current loan compares to the marketplace. Again, a trusted advisor goes beyond closing a loan; he or she provides ongoing value over time. You can create a huge service benefit by monitoring and tracking your borrower’s mortgage loan for them. Because very few loan officers do this, you gain the upper hand and the competitive advantage.

6. Annual Reviews
At these meetings you will ask about changes to the client’s personal or financial situation. You will want to review and explain current options, and answer any questions your client may have. Many advisors are hesitant to schedule regular meetings with their clients. Not only do they miss the opportunity to assist their clients in keeping their plans on track, but they also lose the chance to expand their business through referrals.

If you consistently execute these six recommended steps you can be assured of a constant steady stream of referrals from past clients and other referral sources. Not only that, you’ll put yourself in the top 14.59 percent of loan originators in the nation and make a lot more money as well. Also, consider the alternative. If you don’t elevate yourself into becoming a trusted advisor loan officer, will you be able to compete with those who do?