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The Ten Commandments of Buyer Side Representation

Merry Christmas.  Happy Hanukkah.  Happy Kwanzaa… Festivus… all that stuff.  Lovely… now let’s get down to business.  I’m buying a house.  Along the journey, I’ve paid close attention to how the average Real Estate Agent operates.  I’m sharing these thoughts with my fellow Bloodhounds at the risk of offending some – or perhaps all – of you.  But it all comes from the right place and I hope you enjoy…

Commandment #10:  Have a freaking take.

Are you the type of Real Estate Agent who likes to open doors for clients and then stand silently with a pleased expression as they walk through the home?  If so, I suggest you consider a new profession.  Look, I want to know what YOU think about a home too… that’s one of the reasons I hired you.  I might agree with you, I might not.  But when you have a take, you engage in critical dialogue with your clients.  In my case, I’d trust you more if you tell me what you don’t like about something.  It would make me feel like you’re looking out for me.

Commandment #9:  Don’t tell me you’re a Top Producer.

Because if you are, I probably know that already and all it sounds like is bragging (which most of the time… it is).  Just let your work do the talking for you.  Oh, and here’s just a bit of a peeve… if you’re in the “Million Dollar Club” is that really something worth crowing about anymore?  What is that… 3, 4, maybe 5 houses a year? 

Commandment #8:  Avoid this question:  “So what do you want to do?”

This commandment is closely associated with #10 above.  One agent I was working with loved to interrupt me with that magical question and eventually I told her what I wanted to do:  fire her.  Instead of asking what your client wants to do (which, by the way, they could easily figure out without your counsel)… you ought to continue tossing ideas/suggestions at them.  And if you REALLY want to impress your clients, give them the upside and downside with every suggestion you make.  Then listen.  Simple.

Commandment #7:  Get over the B.S. cliche’ “The Buyer’s Agent service is free because I’m paid by the Seller.”

I almost didn’t write this one because I know it’s going to set some people off.  But Commandment #10 forced me to come clean.  Every seller has their number… their bottom line number.  And whether you like it or not, we live in a new world where access to information is faster and easier – especially for Real Estate Shoppers.  Ten years ago home shoppers would mosey off to buy the Sunday newspaper and leaf through the Homes and Garden section.  Today, we subscribe to RSS feeds, watch Virtual Tours, and hook our iPhones up to listing data via GPS.  No, information isn’t always “instant” (which is how one agent tried overcoming this objection) but it’s instant enough for most consumers.  So, instead of clinging to the B.S. notion that Buyer Side Agents are the “keepers of the data” and provide a “free” service to their clients, I think it’s going to be absolutely CRITICAL in 2011 and beyond to articulate a true value proposition.

Commandment #6:   Pour your online foundation – now.

When I found a home I wanted to make an offer on, quite honestly I didn’t trust that my agent was going to look out for me during the due diligence period.  So I decided to find my own inspector.  Problem was, I didn’t know anyone and needed to start from scratch.  The good news:  my search and subsequent decision was made in about 15 minutes of web work.  This is because Domicile Consulting has committed to the web – and they’ve built an impressive body of work online.  For me, all I had to do is read the Yelp reviews and my mind was made up after a 5-minute conversation with Ross Neag.  Do you have a Yelp profile yet?  I put one together in about an hour and need to build upon it.  If you want to see an extremely impressive online resume, check out our good friend and fellow Bloodhound Mark Madsen and prepare to be blown away.

Commandment #5:  Take risks in 2011 – the kind that make your stomach just a little bit queasy.

I”m a firm believer that you cannot win unless you’re willing to lose.  And this commandment is the only one of my ten that comes from Mark Green the CRM guy instead of Mark Green the home shopper.  In this commandment I’m going to reveal why there isn’t a killer CRM product for the Real Estate industry.  It’s not an issue of building it… that’s relatively easy.  The reason the Real Estate industry doesn’t have a killer CRM product is because CRM vendors won’t commit to servicing a product that its’ clients won’t commit to using.  And here’s the straight dope:  if you ain’t using it, you ain’t gonna pay for it… regardless of how many bells and whistles the CRM has.  This is a debate I’m certainly interested in if anyone has an opposing viewpoint though.  The bottom line:  invest generously back into your business.  Why?  Because your competition won’t.

Commandment #4:  Don’t miss the softballs.

I can’t believe I even need to say this – but you Bloodhounds wouldn’t believe how few Listing Agents didn’t engage me AT ALL when I called about visiting one of their listings.  Seriously.  I’d call the Listing Agent about a property I’d found online. 

  1. Some agents never called me back – ever.  Okay, so maybe this means they had an offer on the home that looked 99.9% iron clad and they didn’t see the need in showing it again.  But hello, McFly, wouldn’t you want to find out my story?  If I had a Buyer’s Agent at that time, I wouldn’t be calling you myself.  Doesn’t this seem to be a pretty promising selling opportunity?
  2. Some agents did a fine job with everything on the showing side – but the sales follow through lacked.  For example, I’m assuming that the MLS here – which I’m guessing every agent in the area subscribes to – has a function where the agent enters a prospect’s email address and home search parameters and then an automated email goes out every day or two.  It wasn’t long before I was getting the same data… in the same format… at the same time… from multiple local agents.  So, the question becomes – how do you break through this clutter and stand out?

Commandment #3:  Conduct a SWOT Analysis & Consider Alternate Comp Models.

Per Commandment #7, technology is changing the way Real Estate is marketed and sold.  Redfin is a great example.  I predict severe downside pressure on the traditional compensation model in 2011 – who doesn’t?  I guess my question becomes:  which side are you on?  Are you clinging to the status quo and hoping for some sort of Hail Mary where everything remains the same?  Or are you willing to analyze how technology and trends might potentially impact your business model in the year ahead? 

I’m not saying that you’ll arrive at a different conclusion than 2010.  But what I am saying is that every business should formulate its’ annual plan.  I like renting a cabin and spending 48 hours focused on business planning.  Here are the steps we go through each winter:

  1. Review the past year vs. the previous year’s business plan.  Successes?  Failures?
  2. Conduct SWOT Analysis
  3. Conduct pie-in-the-sky brainstorming session (idea generation only – do not discuss merits of ideas yet)
  4. Grade all ideas in terms of cost, benefit, time to implement and risk
  5. Rank all ideas (implement first, second, third, etc.)
  6. Assign implementation/ownership of each idea

Commandment #2:  Increase your fiscal literacy.

I have a good friend in the mortgage business named Brian Larrabee.  He’s one of the most honest, hard-working and loyal colleagues I’ve ever had the honor to stand beside.  And I know he won’t mind me sharing one of his secrets to success:  Brian knows how to use historical data, math, logic, and a bit of financial acumen in overcoming common sales objections.  I think it would behoove Real Estate Agents to share this level of competency in this area – not just with a cursory understanding but rather a deep one.

  1. Rates are rising (yet they’re still extremely attractive and will look downright incredible a year from now)
  2. Home affordability (relative to inflation, real estate prices, and % of household income) has never been better
  3. Real estate should serve as the backbone of most Americans’ financial plans

If you’re looking to move some of your buyers off the fence, show them how the recent increase in rates has impacted how much home they could comfortably afford compared with 30 days ago.  Read and internalize what Brian Brady is saying here on this blog.  The beauty:  you’re truly consulting with your clients – and you’re motivating them to buy at the same time. 

Commandment #1:  Answer your freaking phone dude(ette)!!!

I have no idea why, but the average Real Estate Agent lets 94.3% of their incoming phone calls go to voicemail.  Now, of course that’s a made-up number – but to me, that’s about what it felt like.  If there’s one thing I’ve learned about the mortgage industry over the past eight years, it’s that top mortgage professionals answer their phone as close to 100% of the time as humanly possible.  Why?  Here are a few reasons:

  1. Because a commission check is often at the other end of the line.  Who wouldn’t want to answer that call?
  2. Because a client isn’t usually calling to talk about the weather.  They want or need something.  Now.
  3. Why the heck not?  In other words, what are you doing that’s more important at that given moment in time than servicing your client?

Well there you have ’em – my 10 Commandments for the year ahead.  I sincerely do wish each of you the best this coming year.  I appreciate everything I’ve learned here at Bloodhound Blog – and all the friends I’ve made along the way.  2011 is going to rock.


The Evolution of a Salesman

When I graduated college in 1992, I couldn’t wait to put what little I’d learned into play.  Fortunately, I had a role model (“Who We Are”/”People”/”Ken Jones”) willing to let me shadow him like a puppy dog twelve hours a day.  Before long, I became a pretty solid “ad man”.  But it wasn’t the media planning or copywriting that inspired me.  It was consulting with our clients.  It was listening to their problems and challenges – and finding creative ways to solve them.  Problem was, the company I worked for at the time was fat and happy.  They had “enough” business to pay for our waterfront office space and their German automobiles.

I thought that mentality sucked.

At the time, I was low man on the totem pole.  Frankly, I’m not even sure my status qualified for a head on the totem pole.  This was a status I gratefully would never relinquish.  Yet, typically it was either me or Ken who opened shop every morning and the two of us would inevitably lock up every night.

After finishing the annual Port of Miami print media plan three months into the year – and by the way, you ain’t lived until you’ve duked out a 12-insertion deal with Inbound Logistics magazine – something strange happened… I ran out of things to do.  We in the real estate/mortgage profession can’t even fathom this ever happening, right?  I was getting a paycheck every two weeks and was doing absolutely nothing to earn it.

Apparently, my ass-sitting didn’t bother the owners of our ad agency very much.  But it bothered the hell out of me.  We needed some new clients – and if the owners weren’t going to get off their duffs to find some, hell… I would.  Now if you’d known me then, you’d probably be laughing right now.  I was barely old enough to buy a beer.  I’d literally just gotten my degree.  I had absolutely zero business experience.  And I was picking up the Yellow Pages and cold calling some of the largest and most prestigious advertisers in the Tampa Bay area.  I was too young, stupid and naive to know it wasn’t going to work.

Have you ever experienced that moment when you asked for the moon… and got it?  That’s what happened one day when I landed an opportunity to pitch the Bay Area Midas conglomerate of stores.  I doubt I’d ever been that nervous in my life and I doubt I’ve been that nervous since.  We didn’t win the business, but it was a quality at bat.  One of the few at bats our firm had all year.  And it was that day when I realized that I wanted to be a salesman.

Today, the ad agency I’d worked for is long gone.  Hardly a surprise, really.  But I’ve been selling ever since and I love it.  We are so lucky to have jobs where we get the absolute best of both worlds.  On one end, we get to make it rain and create revenue.  On the other, we get to consult with our clients and make critical business decisions.  If we’re really lucky, we can even mold our product into whatever we want it to be.

But the art of selling is completely different than it was back in 1992.  The days of picking up the phone and and instantly connecting with a decision maker who controls a $10 million/year advertising budget are long gone.  The days of walking into a broker’s office (note, I’m a vendorslut) with a smile and a handshake doesn’t get the warm and fuzzy reception it did back in the day.  We survivors… we’re damn busy and we don’t like being interrupted by cold calls no matter how svelte the guy’s tie is.  And it wasn’t until I started getting cold called at Top of Mind when I realized how inherently rude the practice is.

Two things have permanently changed about my business today, and I’d like to share them with you:

1)  Our Clients Have Become Our Salesforce– I’ve tried it all.  Outside salespeople.  Inside salespeople.  Celebrity Spokesmen.  Tradeshows.  The Works.  But I can honestly say that today, only 7 years in business, we get 90 to 100% of our clients via referral… and we win more new clients each month without a single salesperson than we did when we had 12 outside AE’s knocking on doors.  If you are a Realtor, you have exactly one asset in this business and one asset only – and that is your client database.  Do your clients know how much it would mean to you if they were to ever refer just one single sales opportunity your way?  If not, there are ways to convey this message without begging or sounding greedy.  That’s a different post for a different day.  But you need to let your clients know what their referrals mean to you.  What would one more at bat per month mean to your business?

2)  My First 45 Minutes with Brian Brady Provided an Epiphany – There is not a day that goes by where I’m not grateful for the lesson Brian taught me approximately two years ago.  The power in Social Media is not in our connections.  Let me repeat that for effect because it’s arguably the most important and powerful lesson anyone’s shared with me since the days of Ken Jones… THE POWER IN SOCIAL MEDIA IS NOT WITH OUR CONNECTIONS.  It’s in our connections’ connections.  Your connections know you.  Hopefully they like you.  So it stands to reason they know other people who ought to get to know and like you too.  Surely you’d be willing to reciprocate for them right?

And so, my fellow cat skinners, there is no reason to ever make that scary cold call again.  As we honor and celebrate the fourth birthday of Bloodhound Blog, I’d like to thank each of you for what you’ve meant to me.  You give without asking for anything in returnYou motivateYou innovate.  And perhaps above all you make me laugh.  Thank you – it is truly a privilege and honor to contribute to this community.


Another Life Lesson Courtesy of MLB

I love sports.  My wife – well, she pretty much despises them.  Why, she’ll ask, do I so often waste my evenings watching a game between two teams I barely care about?  I typically reply with “Sports are the ultimate in reality TV”.

It seems every week or two we’re dealing with another example of athletes making complete shit storms of their lives.  Tiger Woods.  Ben Roethlisberger.  It’s a long list.

However, this week something happened that inspired me.  It was a complete injustice – a robbery.  Detroit Tigers pitcher Armando Galarraga did something no other Detroit Tiger has ever accomplished.  He threw a Perfect Game.  Heck, the feat has only been accomplished 20 or so times in the history of Major League Baseball.  Only, on the way into the history books, something happened.  In case you haven’t seen it, you can find the video replay here.

The story, however, only begins when Galarraga’s foot steps on the first base bag.  The juicier – and more compelling – story comes out of the aftermath.

Photo: from

Jim Joyce, the umpire who missed the historic call was devastated when he saw the TV replay:

“It was the biggest call of my career, and I kicked the [stuff] out of it,” Joyce said, looking and sounding distraught as he paced in the umpires’ locker room. “I just cost that kid a perfect game.”

No excuses.  No attempt at rationalization.  It was a bang-bang play that routinely gets botched by first-base umpires.  If this happened in the 3rd inning rather than with two outs in the 9th, we wouldn’t even be talking about it.  And the wonderful life lesson wouldn’t have been shared:

1)  Jim Joyce owns up to his mistake.  He then offers a sincere and heartfelt apology to Galarraga and all Detroit Tigers fans who were broken hearted that evening.  Not two weeks later, but immediately.

2)  Armando Galarraga accepts the apology and takes the high road.  “I have a lot of respect for the man. It takes a lot to say you’re sorry and to say in interviews he made a mistake.” said Galarraga.  Here’s a brief overview.

Here’s my take:  Armando Galarraga could have been the 21st MLB pitcher to toss a perfect game.  But as it turns out, today he’s the only MLB pitcher who was robbed of one.  And he’s the only MLB pitcher who was presented a truly historic opportunity to set an example for millions of kids out there in the process.  As well as millions of adults.  Case in point:  less than one year ago Mark Buehrle tossed a perfect game for the Chicago White Sox.  I had to look it up online because I couldn’t remember his name.  Less than a month ago, a pitcher named Dallas Braden achieved perfection.  He’s likely going to become a distant memory – at least for me.

But I’ll always remember Armando (not Andres like in my first take on this article – thanks for the catch Doug) Galarraga and Jim Joyce for the classy example they set for us on June 2, 2010.

I screw up all the time.  In life, I think we all do.  Joyce and Galarraga reminded us there’s an honorable way to handle it.  And that’s reality television I can watch anytime.


Why Stop With the Bath Water When You Can Throw Out the Baby At No Additional Charge?

Full disclosure: I’m neither Democrat nor Republican. I’m neither Mortgage Broker nor Mortgage Banker. I am a consumer – just like you.

I haven’t been over here to play as often as I’d like because of some other projects I’ve been passionately pursuing.  My bad, because this is still the place to be for people with a take.  And I’ve got a take:

What the American public doesn’t know is what makes them the American public, alright?

– Dan Akroyd as Ray Zalinsky in the movie “Tommy Boy”

For the rest of this article to make sense, I’d ask that you take 2 minutes to read this letter authored by Sen. Jeff Merkley to Fed Chair Ben Bernanke dated Dec. 24, 2009.

Here’s the cliff’s notes version the way I read it:

  1. Mortgage brokers are crooks.
  2. The subprime debacle happened because consumers were “tricked” into loans they couldn’t afford to repay.
  3. Eliminating the Yield Spread Premium (YSP) will fix our problems.

To support his argument to kill YSP, Merkley cites a NY Times editorial piece painting the mortgage broker as unethical and the root of the subprime debacle.  Here are a few questions I’d like to pose to the pound for thought and discussion:

  1. YSP existed in its current form up until Jan 1, 2010 – when the new Good Faith Estimate and RESPA rules took effect .  By the way, is there still such a thing as a “subprime loan”?  What banks are writing “subprime loans” today?  Six months ago?  A year ago?
  2. Did it EVER make any sense that a bank would knowingly extend a loan to a borrower who had demonstrated a propensity to default and thus would be more likely than normal to default on their mortgage?  Where is the mention of the “stated income” loans in Merkley’s letter.  Certainly THAT didn’t contribute to the subprime mess, right?
  3. FACT:  today, the mortgage broker CANNOT earn YSP.  YSP belongs to the borrower and may only be rebated to the borrower.

I’m going to repeat that for effect.

  1. Senator Merkley, less than one month ago
  2. Authored a letter (co-signed by approximately 20 other Senators)
  3. In the guise of consumer protection
  4. Calling for the elimination of Yield Spread Premium
  5. Which today belongs to nobody but the consumer
  6. Because this will help us solve the subprime crisis
  7. Which solved itself as soon as the banks realized that a borrower with a 480 credit score earning $34,000 annually might not be able to afford a $450,000 home (Stated income loan?  Are you kidding me?  Who was the Einstein who thought THAT was a good idea?).

The Merkley letter, both in content and in timing, shows a level of ineptitude I never thought possible – even for an elected official.  Today, mortgage brokers must disclose their compensation up front and in full on the new Good Faith Estimate.  Any yield spread premium earned MUST be rebated to the borrower.  This, folks – is extremely consumer friendly.  Elimination of YSP HURTS the consumer in several ways:

  1. It further skews the competitive playing field in favor of depository banks.  Yes, the BIG banks like Wells Fargo and Bank of America.
  2. It limits consumer choice.  Now, instead of hiring a trusted advisor (who has already disclosed what his fees are up front) to act as your fiduciary and find the right mortgage for your needs, you’ll be on your own to shop the banks.
  3. It’s dangerous precedent.  Do you think the movement to eliminate YSP stops with the broker?  Immediate pressure will begin to fall on the regional mortgage banker – the lender who borrows its funds on a “warehouse line” and is eligible for back-end compensation in the form of SRP (service release premium).

Who’s next when the government’s finished telling mortgage professionals what they ought to make, and how?  You think the idea of limiting what a Real Estate Agent might sound juicy in a letter to Congress?  I’ll close with another movie quote:

And whatever your particular problem is, I promise you, Bob Rumson is not the least bit interested in solving it. He is interested in two things and two things only: making you afraid of it and telling you who’s to blame for it. That, ladies and gentlemen, is how you win elections.

– Michael Douglas as President Shepherd in the movie “The American President”


Taking the Genius of Brian Brady to the Next Level: How to Pipe Linked In Network Updates Into Your Feed Reader

In the spirit of my #1 Bloodhound Blog Unchained takeaway, here’s a 70% ready-to-roll video.  Brian Brady was kind enough to teach me his brilliant way of leveraging Linked In to establish new relationships.  I haven’t been executing the Brady Principles consistently enough.  Check out a little something-something I stumbled upon (no pun intended) today:

Here are some related links if you’d like to learn more about Brian Brady’s Linked In techniques or Google Reader:

Brian Brady Training on Linked In (awesome webinar we recorded in March)

Google Reader vs. Twitter Lists (why I disagree with a recent article Scoble wrote vs. Google Reader)

Introduction to Google Reader (great article by Mark Madsen, fellow BHB contributor)


33 Quality Touches for Real Estate Agents

In Gary Keller and Dave Jenks’ game changing book “The Millionaire Real Estate Agent”, the authors recommend a “33-Touch” follow-up system to stay top of mind with “mets”.

Millionaire RE AgentIt was actually a brilliant idea – for Keller.  KW agents immediately began flooding the market with (expensive) calendars, post cards, and chotchkies – building the Keller Williams brand in the process.  While Century 21 squandered ad dollars sponsoring the MLB All Star Game and RE/Max floated its balloon on expensive and largely ineffective national TV ad buys, Keller Williams gained market share without spending a corporate dime.

Back in 2004, when the book was published, I felt strongly that 33 annual touches was too high a frequency for real estate professionals.  But that was before I started exploring social media.  Today, it’s very conceivable for a real estate agent to reach their database with 33 quality touches per year.  Below, I’ve mapped out a sample 33-touch program.

Postal Mail:  5 touches

Direct mail is relatively expensive when compared to some of the vehicles we’ll discuss below – but I still believe it should be a core component in any CRM campaign.  Of critical importance – your direct mail efforts need to look and feel as if they are “one-to-one” correspondences.  I have never preferred post cards and “newsletters” because they are clearly mass-mailing efforts.  We want your contacts to believe that you specifically thought of them when we reach them via direct mail.  Direct mail ideas:

  • Birthday cards for the client and co-client
  • Thanksgiving card (rather than the stale holiday card approach)
  • Market updates (make these a mail-merged professional letter, not a bulk-mail blast)
  • Announcements (invites to charity events, new hires, testimonials/case studies, etc)

E-mail:  12 touches

I’ve written a few articles about the trials and tribulations of email marketing on the Top of Mind Blog – all of which boil down to common sense.  Email is cheap and easy.  This low barrier to entry creates more and more emails being dumped into our inbox every day.  Clutter is a marketer’s worst enemy.  Your email correspondences must meet an extremely high bar in order to maintain readership and response over the long haul.  Here’s our email approach at Top of Mind – please note that our program is built for mortgage professionals, but I still think these principles could apply for real estate professionals:

  • Quarterly Neighborhood Home Sales Reports (every 90 days we advise each contact on what homes sold within a 1/4 mile radius from their home)
  • Quarterly Mortgage Checkups (advises each client how their mortgage is performing vs. market conditions)
  • Beyond the Media (aims to debunk the doom and gloom consumers are bombarded with in the mainstream media, written quarterly)

Phone Calls:  4 touches

Most of us fail, myself included, to actually talk to our past clients frequently enough.  After all, it can be awkward calling a past client who is likely not in the market for our services.  But the beautiful thing about an effective CRM program is it gives us natural, compelling reasons to contact our database by phone.  For example, when you send a community real estate market update, you could simply select 30 clients to follow up with each time with a phone call.  Questions you might ask:

  • Did you receive the letter/email?  (Heck, it’s important for us to ensure that our content is reaching the recipient and is being read!)
  • Did you have any questions or concerns I might be able to address?
  • Might you know anyone who I can help?  (Say, for example if you’ve written about the home-buyer tax credit.)

Web 2.0 – Facebook, Twitter, Linked In, Blogging:  12+ touches

Up to this point, we’re “only” at 21 touches/year… still a long way from Keller’s magic number.  Enter social media and blogging.  It’s virtually impossible to measure how often, say, a Facebook status update is read by a contact in your database… or a blog article.  And I certainly don’t mean to beat a dead horse here… but these vehicles absolutely “work”.  I laughed out loud this morning when I saw Geno’s Facebook entry about his Persian night out.  I know intimately how Brian Brady lives and dies with each Chase Utley at bat.  Above all, social media provides the ideal complement to traditional CRM vehicles because they allow us to connect on a personal level with our database – rather than just on a professional level.  I never liked this expression… but after all we are “buying brain cells” here.

The Glue That Holds Everything Together Is:

Content.  Always has been and always will be.  It’s not enough to “stay in front of” your database anymore.  The ultimate goal is to deepen relationships with your contacts.  Before you hit the send button on a campaign, ask yourself a few questions:

  • Would I see value in this correspondence as a consumer or would I immediately hit the delete button?
  • Is the correspondence about me or is it about the contact I’m sending it to?  What’s in it for the reader?
  • Is this correspondence a “one-to-one” touch point?  Will the recipient believe that I thought of them specifically?

Today, the concept of “33 touches to your database” doesn’t seem so intimidating anymore.  Rather, the challenge becomes providing deeper, more compelling content than your competition.


A Bloodhound’s Proven System for Sniffing out Hotel Deals

Hi everyone!  I’ve been reading BHB religiously but have been a very naughty contributor.  This is still my favorite blog and it’s an honor to be a part of this community.

I recorded a 6 1/2 minute video detailing a fun little system I’ve been using to save thousands – yes, thousands – on my hotel costs.  I hope you find it worthy.  If not, flame away and I’ll stick to what I know best next time.


Vultures to the Rescue – HOORAY!!!

Here's the email - I added the red boxes

What the hell is a Forensic Loan Audit you ask?

According to the SPAM email (above – I drew the boxes for emphasis) that landed in my inbox last night, a company called National Loan Auditors provides a service that:

1)  Markets to loan originators with the purpose of providing loan file audits that

“expose federal, state, county and statute violations, along with any unethical predatory lending practices.”

2)  So mortgage professionals can

“leverage [their] company or firms ability to assist [their] past and present customers, helping them negotiate better mortgage rates and terms with their existing lender…”

3)  Oh, and by the way the mortgage professional can also

“earn up to $1,700 on each case file”

Um, so what you’re saying is that I can market to my past clients, identify errors, omissions and fraudulent activity that occurred when I originated their loan AND pocket $1,700 in the process?  Seriously.  Am I reading this incorrectly?

Our company used to provide loan file audits to our clients too.  [If we could have made money doing it, we still would be.]  The purpose of our audits was to help identify these same types of errors and omissions.  The difference was in our motivation:  our clients used our feedback to improve their compliance scores on future originations.  From experience, I can tell you that even the cleanest and most ethical shops had compliance errors in their files – most of which were innocent, victimless mistakes.  For example, in the State of Georgia, an originator is considered to have taken a Loan Application when collecting any financial information from the borrower – and of course a Good Faith Estimate is required to be sent within 72 hours of the loan application.  This is a common mistake originators make (both banker and broker by the way) – one of many easy to make errors.  There are 20 other similar examples I could point out here but let me get back to the point…

Now you have these vultures performing similar audits with the malicious intent of leveraging even the most benign of errors into strong-arming banks into loan modifications.

Does this type of value proposition help illuminate why the large depository banks are trying to put the small broker out of business?  Make no mistake, most of the mortgage originators who are left in the game today are professionals.  I have the privilege of working with many of them on a daily basis.  But it’s still way too easy for any schmuck to quit his job at the car lot and originate mortgages – and THAT, my friends (yes, that’s a pun) is the problem with the industry.

I don’t have the answers.  But here’s a start – all mortgage originators should have the equivalent of the Series 7 designation for financial professionals.  Obviously, it shouldn’t be the same curriculum, but my point is that it provides 1) a strong educational foundation and 2) a high barrier to entry into the business.  Mind you, this is only a start.  Mortgage professionals also ought to have more skin in the game – one of the few components of HR 1728 I agree with.

This is the scariest article I’ve ever written because it seems I have everything to lose by picking a fight with someone I don’t even know.  Further, I have nothing to gain.  But I wrote about this sort of thing on several occasions and it’s high time that I stepped up and provided an example of how this code ought to work.  When we see things that reek of injustice and damage our industry’s good name, it’s up to US to speak up and take action.  It would have been really easy for me to just delete that ridiculous email but instead I decided to write this article.

I sincerely hope it makes a difference.  Greg Swann, Brian Brady – you guys have inspired me to try and make a difference.  Albeit, this is really damn scary.

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If You Will Not Assist Us With the Shrubbery, We Will Be Forced To Say “MORTGAGE!!”

Oh, what sad times are these when loan originators can say such words as “Free” and “Mortgage” at will to their contact database?!?!

For if thou doest seek thine Holy Grail, or at least a decent shrubber, ye shalt best consult thy Book of Armaments here before lobbing thine Holy Hand Grenade of Drip Email upon thy database.

In Addition to Nee, Pang and Nuuuwon, Ye Shalt Also Avoid:

Okay, enough of the silly talk.  I’ve got actual work to do.

1)  Free + ________: Permission Marketing proponents love giving free stuff away.  Make it a point to avoid this evil word your email subject lines.

2)  Mortgage: Perhaps the evilest word of them all!  How do you avoid this one if you’re a loan originator?  I guess you could substitute nuuuwon.  Or you can just make it a habit to check your subject lines for keyword spam infractions before sending.  Either will do.

3)  Low Interest Rates: Not that we have a problem with that right now.  So I’m announcing a temporary hunger strike until rates drop back below 5%.  Or at least until dinner.

carrot-top-steroids1Hey, you’ve been a great audience.  Now I’ll turn the stage over to not a good friend of mine who definitely has not been doing any steroids or performance enhancing drugs.  His jokes sucked before he looked like this too.


Please Help Me Welcome NAMB President Marc Savitt To Web 2.0 – Action Step Requested

I wrote an article at Lenderama yesterday.  Here’s the deal:

I’m a card carrying NAMB Basher and have been for several years.  And I’m hardly alone.  The other day, I had a 10-minute phone conversation with NAMB President Marc Savitt.  The conversation inspired me to write the article you’ll find on Lenderama.

If you’d be so kind to read that article, and if compelled, please leave a comment letting Mr. Savitt know that if he engages us, we’ll respond – and above all that you appreciate his efforts.  Now, more than ever, the mortgage industry needs to come together as one.  Brokers, bankers, supply chain… all of us.

Please help me give Marc Savitt a warm welcome to the world of Web 2.0.  Thanks in advance.

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If Not Us, Who?

I’m in a lousy mood today and I need your help.

The crooks are resurfacing.

If you thought the bad guys have been flushed out of the system, I’ve got some bad news for ya.  We spend an inordinate amount of time debating who and what caused the mortgage meltdown.  We spend very little time debating how we make sure it never happens again.  The key word I want to emphasize here is “we”.

It’s not up to the government to fix this mess.  It’s not up to NAMB, or NAR or Ghostbusters.  It’s up to US – the folks in the field and on the street that see the dishonesty and suck in the stench seven steps before it gets packaged into mortgage backed securities.

I wrote an article entitled The Code:  How the Mortgage Industry Could Self Regulate a few days ago.  Alas, my baby blog is a PR2 and I doubt too many people saw it.  I think it’s an important concept and I am grateful for a venue like Bloodhound Blog to facilitate the conversation.

If you leave it up to your government, you get lame-brain ideas like HVCC.  I’m telling y’all right now, right here that I’m going to do my little part to protect the general public from the bad guys.  We need to clean up our own industry.  Brian Brady has it right in my book:  you do wrong and he’s gonna “come down on you like a ton of bricks”.  People look to us as fiduciaries, and I do believe in buyer beware.  But unfortunately the doofus who doesn’t do his homework and gets himself ripped off just lowered the property values of every smart guy on his block.

So here’s the question I want to pose to the Bloodhound Community:

I know a bad guy, a predatory lender who ripped off hundreds of borrowers.  He went away for a while and now he’s back.  What can I do about it?  How do we take our industry back?


Show Me “Paint the Fence”

I have a confession to make:  CRM isn’t as complicated as people tend to make it.  Take a look at an app like Salesforce and they purposely build the interface to look like you’re piloting a 747 jet when in reality all you’re looking to do is deepen a few hundred relationships and organize your life.  We CRM experts like to try and look a lot smarter than we actually are.

Over the next few weeks, I’d like to share some easy action items that will make managing your database a snap.  WARNING: I’M FLORIDA EDUCATED SO I TEND TO KEEP THINGS AT A 7TH GRADE LEVEL.  GREG SWANN: INITIATE LOBOTOMY NOW.

Lesson #1:  Paint the Fence

Remember when Mr. Miyagi made poor Daniel Son paint the fence?  And wash the car?  And paint the fence again?  If we’re gonna make you a black belt database manager, you’re going to have to suck it up too.  One must not deliver kick to opponent family jewel without proper training.

The most common problem I notice when consulting with mortgage/real estate professionals:  the quality of your data sucks.

  1. Lazy Data Entry:  If you’re populating data from an internet form, expect respondents to take as little time as possible getting to the goodies you’re dangling.  No less than 50% of your data will come in with capitalization, punctuation and other grammatical errors.  There are some automated ways to help clean this data, and I’ll leave that for another day.  But in the meantime, I’m asking you to make a habit of cleaning data as you go.
  2. Incomplete Data:  For the belly-to-belly folks:  I have my salespeople take the extra 120 seconds to visit a new prospect’s website as they enter data into our CRM system.  When I find records with just a name and email address, I get pissed.  When you take the extra time to dig for granular data on a contact, you’re in essence learning more of their story in the process.  Did my prospect give me a fake phone number (easy to learn if the the phone number on their website is different than the one they gave you!)?  How polished of a prospect am I talking to (ie:  how nice is their site?)?  Does my prospect have an area of specialization that I ought to know about?  You get the idea.  While you’re at it, go ahead and populate their physical address.  Why?  Because if you get into this habit today, you won’t have an excuse to hold off on conducting a timely and profitable direct mail campaign down the road because you need to “clean your data up”.  When opportunity arises, you’ll be able to pounce immediately.  Case in point, the client I collaborated with on the preceding letter originated 52 loans in December 2008 – by himself.
  3. Make Notes About the Contact:  When I enter a new contact into our mortgage CRM system, I always make a quick note with details on where the prospect came from and how impressed I was with him/her (if at all).  Remember that one of our core functions with CRM isn’t just identifying who’s most likely to buy, it’s just as important for us to segment out our B, C and D players.  I’ll be talking about data segmentation in more detail another time.

I know I shouldn’t have to say this, but I will anyway.  BACK YOUR FREAKING DATA UP!  Even today I’m dealing with people, even smart people, who lose their entire DB when a computer goes down.  If you’ve got your entire database on a desktop running ACT or Outlook, and you don’t know how to go about backing your data up, leave a comment and we’ll address that down below.

Garbage In –> Garbage Out

We’ve heard this saying a million times, but 9/10 of you still do a poor job of maintaining a pristine database.  Today’s takeaway:  don’t finish reading this and say “Yeah Yeah, I know Green, we get it”.  Just make sure every record in your DB moving forward contains the following fields:

  1. FN & LN
  2. Nickname (if applicable)
  3. Company Name
  4. Main Phone
  5. Cell Phone
  6. Full Physical Address
  7. Email Address (secondary email address is also huge if you can get it)
  8. Website Address
  9. Referred By
  10. Quick Note:  How you met them, how impressed you were, plus an item to jog your memory)

Are you guilty of keeping a messy database?  Hire a high school kid to dig in and fix grammatical, spelling and other errors one night a week.  Within a couple months, you’ll be good to go.  And that’s when things get fun.


Twitter? I barely even know ‘er.

More speculation this week surrounds Twitter – word has it Apple’s dangling $700 million in front of them.  Well roll me up in saxony carpet and toss me on down the stairs – but I don’t get it.

If I’m understanding this correctly, the object of Twitter is to get as many complete strangers as possible to “follow” you.  In return, you’ll be a swell guy and follow them back.  The next step is to “Tweet” mindless nonsense so your “followers” can ignore you in 160 characters or less.

Now that’s not to say that everyone’s Tweets are nonsense and ignored.  Only about 99.5% of them.  The other .5% are gems worthy of “Re-Tweeting”.  Huh?  I guess blogging’s become oh-so-2006, which is a bummer because I’m just starting to get the hang of it.

As Twitter-mania spins out of control, we have CNN battling Ashton Kutcher in a race to 1 million followers (which got me thinking, what’s Ted Turner’s commission rate on the $700 million?).  An NBA player is reprimanded by his coach for “Tweeting” during halftime of a game.  Oh the humanity!

I have a lot of questions, and I know that the Bloodhound Nation is the right place to turn for answers:  Is Twitter the new SPAM?  What happens when each of us follows 2,500 people and 2,500 people follow us?  Do we then just hire an assistant to sort through our daily tweets?

If you’re pro-Twitter, I’d love to hear how you’re putting it to work for you.  Are you seeing tangible results?  If so, are they scalable – ie:  will they diminish w/ clutter or do you foresee future success as Twitter grows?  Where does Twitter rank in your Social Media hierarchy?

More importantly, is Twitter a fad?  Apparently Apple doesn’t think so.  Where do you guys see Twitter a couple years down the road?


Engenu Webinar w/ Greg Swann TONIGHT @ 8:30 EST/ 5:30 PST

If curious to know how Greg Swann builds property websites in the time it takes most of us to eat a bowl of cereal, tonight’s the night.

What: Engenu demo with Greg Swann
When: 8:30pm EST, 5:30pm PST
Where: At your computer

We’ll be recording this session too, so if you can’t make it and would like an email w/ the replay sent to you, go ahead and register anyhow.

Register Now Button

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“No Matter How Good You Get, You Can Always Get Better…

… and that’s the exciting part.”  End Quote.

That’s a peek into the mind of the man who arguably will go down as the most dominant athlete of all time – Tiger Woods.

For those of you who aren’t golf fans, let me rewind a few years.  Tiger Woods was firmly entrenched as the #1 player in golf.  And by firmly entrenched, let’s just say that the #2 player in the world couldn’t even carry Tiger’s bag.

Yet, at the height of his dominance, Woods shockingly fired his “swing coach” and re-engineered his entire mechanical approach to the game.  Virtually everyone in golf thought he was nuts.  And the results were far from immediate.  In fact, some players on the PGA Tour even began referring to Tiger as “beatable”.

We all know what happened next… he won last year’s US Open with what basically amounted to a broken leg.  Woods refers to this victory as his greatest ever.

Here’s the thing:  Tiger Woods doesn’t share his secrets of success with his peers.  Any golfer looking to supplant Tiger as the world’s greatest player is going to have to figure it out for himself.

But for some reason, the sharpest minds in the real estate industry are willing to share what makes them successful with the rest of us.  Here are some of the questions I asked myself before committing the time and money to attend Unchained:

  • Can you create your own website without any help from anyone?
  • If so, how long does it take you to publish something worth seeing?
  • Are you ranking for the keywords your prospects are Googling?
  • Are your systems outdated and archaic?
  • Is there someone in your market who’s about to catch and pass you because they know more than you do?

Here’s another Tiger Woods quote from early in his career:

“Second sucks.”

If you live within 500 miles of Phoenix and you’re not committed to attending Unchained, chances are good there’s someone down the street who will be nosing up alongside you very soon.

I’ll be honest with you – I get the feeling my competitors are crawling up in the fetal position right now… cutting costs and wondering where the good times have gone.  But I’m not counting on it.  I’m making the investment to better myself and hopefully widen the gap between #1 and #2.

Hopefully, someday I’ll be able to take an entire year off and remain the best at my game – just like Tiger Woods.

If you’re going to be at Unchained, I can’t wait to meet you.


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