Close more deals by matching your borrower to the best program
How to get and work a referralTed Almeidarelationship, referral, prospect, sales tips, motivation All successful brokers and loan officers know the mortgage business is a relationship business, and every relationship has to start somewhere. Business relationships are very similar to personal relationships in that nobody likes cold calls. If you're not working referrals, you're working too hard. A close friend of mine told me of an experience she had the other day while shopping for clothing. A guy came up to her, complimented her on her looks and used the smoothest lines he had to get to the next step in the relationshipa date. My friend is a single lady in her mid-40s, with no kids at home, who recently shared with me that she would like to find someone. Even so, this poor guy had next to no chance with her because she didn't know the first thing about him, nor was she expecting his advances. For all she knew, he could have just been released from prison just as easily as he could have been the loving guy she has always dreamed of. Had they been introduced, he probably would have at least gotten a date and they might have hit it off. As it was, she politely thanked him for the compliment and excused herself from the situation. In the business world, you may have the exact product or service a borrower needs and wants. The timing may be perfect, as you have the ability to meet all of the criteria for the borrower's transaction. But this is a relationship business and that's what you don't havea relationship. They don't have an understanding of who you and your company are, so how can they trust you to deliver on your promises? This is exactly why you need to know the importance of a great referral. What makes a great referral? 1. The referral needs to come from someone known by all parties involved. This may seem obvious, but many times we are tempted to ask for a referral from someone we have just met. Nine times out of ten, this approach doesn't work well, as the referrer doesn't know you well enough to build you up to the prospect. We'll talk about the "build you up" part in a minute. There are many sources of referrals, such as family, friends, co-workers, current and past clients and people you see on a regular basis, such as club or church members, parents at Little League, etc. 2. The person making the referral (the referrer) needs to know what kind of relationship you want to establish. You need to paint a picture in the referrers mind of what you do. This might sound something like this: "Sam, let me help you understand all that I can do as a residential mortgage broker. I work with a variety of banks and lenders that want to make home loans. We've got lenders for people with bad credit and no money, and we've got another set of lenders for people with great credit. It's really fun and rewarding to be in a business where I can help so many people get the perfect loan for their individual needs. So, what I really do is pair people like you and your friends with a mortgage that is the right fit for them." Whatever you say, it's important for the listener to understand what sets you apart from others in the loan business and what you specialize in. In the above example, we specialized in residential mortgages and we are different from others in that we find the right bank loan for the individual's needs. If you work mostly on purchase money with real estate agents, then go ahead and state what it is that makes you so good at that. 3. The referrer needs to know the kind of person (prospect) you're looking for. This is where you really start "asking" for the referral. Again, paint a mental picture of the type of borrower you are looking for. Don't just say, "Do you know anyone who needs a loan?" Say something like, "Sam, all of us know someone that is either already a homeowner or wants to be one, right?" This is setting Sam up to make him think for you. Continue by saying, "I'm looking to help people that might want to refinance their home, either to get a better rate or to restructure their debt, giving them more financial freedom. I would also like to help people you know purchase a new home. I have the ability to help and enjoy working with people from all different kinds of backgrounds, whether they just had a change of employment, bought a new car or, like yourself, are self-employed; even retired folks like my mom. Regardless of whether they've got a lot of money in the bank, or may need some help in that area, I have the programs and expertise to help. Do you know anyone that I can work with in finding the best mortgage loan for them?" Now, shut up... 4. The referrer should be allowed time and space to give you some names of potential clients. What you've just done is painted a mental picture of whom you want to work with. They have to take a few moments for the picture to come into focus and start weeding through the people in their lives who may or may not want what you have to offer. Then, they are going to process things like personality types, location (are they close enough to do business with?) and whether they have a need for your services (are they at a place in life where they can really start thinking about getting a home?). This takes some time. Usually, about the time you say something stupid like, "Here's my card if you think of anyone!" is when they are about ready to give you two or three pretty good leadsyou just let them off the hook! It's going to seem like an eternity, but don't say anything for about 45 seconds. If they still haven't given you a lead, then paint more of that picture. "Sam, last week I helped a couple buy their first home in Roseville, and they couldn't even prove their income because he's a backyard mechanic and shes a waitress. The week before that, I refinanced a business owner's home so that he could get the capital he needed to buy more warehouse space. Are you sure you don't know anyone?" Shut up for another 30 seconds or so. You will almost always get a few leads if you take time to script out (it helps to write it down) some ideas of what you will say about the mental pictures. Don't get discouraged if you don't get a lead, because there will be other times you will see your "referrer," and the next time, they may have thought about your request and give you a name and number. If not, simply ask them again for a lead. 5. Once the referrer has identified a potential prospect, ask why the match will be a good one. Once you have been provided with names and numbers of people for you to call, ask the referrer for a little bit of background on why they think the match is a good one. You dont want to waste anyone's time calling on deals that are dead to begin with. On the other hand, if it is a good match, then say something like, "Yes, I did a loan just like that last month," and give them some specifics of the deal. 6. Important! Always ask the referrer to give the prospect notice that you will be calling on them sometime the following day. If you don't follow this step, you are just cold calling leads. So we need to ask Sam to do everyone a favor. "Sam, it sounds like Cindy could really use what I have to offer. I don't know about you, but I hate cold calling someone, even if I know that they can use my service, because it catches them off guard, and nobody likes to be caught off guard, do they? Sam, could you please do Cindy and me a huge favor and tell her that I will be calling her tomorrow? I will call you again before I call her to make sure that you've had a chance to reach her. I really appreciate it and I think she will, too." The reason this step is so huge is that when Sam makes the call to Cindy, he will be compelled to brag about you in ways that you could never brag about yourself. If you've just finished a deal with him, he will have to say something like, "Ted just finished my loan when nobody else would even look at it. He got me a great rate because he shopped my loan with different banks. He always called me back and answered my questions. He's terrific to work with! I think he can help you because..." See what I mean? Your referrer has to brag about you so that he can show how smart he was to use you, and to let his friend know it would be dumb not to give you a try. I've used this method hundreds of times, and it has never failed to work. If you have never done business with Sam before, then he might say something like, "I was talking to my friend from church. His name's Ted and he's a mortgage broker. I told him about your situation and he told me that he deals with loans like yours all the time. Because he works with a lot of different banks, he can find a loan just for you. He even did one last week that was an almost identical situation to yours. He said he could call you tomorrow to talk about what you need. That's okay, right?" Even if you haven't done business in the past, Sam will still try to build you up as much as possible by explaining that you're his friend and why Cindy should use you. 7. Follow up to make sure the referrer has contacted the prospect before you call on them. That last important step doesn't do any good if you don't call the referrer (Sam) prior to calling the prospect (Cindy) to make sure some contact has been made. If you call the prospect first, then it's a cold call and your chances of getting to first base just went way down. 8. Call the prospect when you say you will. Give yourself a lot of flexibility and say that you will call "sometime the following day." Don't get pinned down to calling at 3:00 p.m. because: "People don't like it if they expect a call at 3:00 p.m. and it doesn't come until 5:00 p.m.; and "A set time sounds like a commitment and it's too early in the relationship for commitment (right guys?). On the other hand, if Sam called Cindy, took the time and trouble to build you up and said all sorts of great things about you, you had better call the prospect when you say you will. You can be sure Cindy will tell Sam you didn't call her or were late calling her, and you will probably lose a good source for future leads in addition to losing Cindy's business. 9. Follow up. Follow up with the person making the referral and thank them for it. Let him know how things went as soon as you make your first contact with the prospect, whether it's good, bad or indifferent. This is also a great time to ask if they've thought of anyone else that could use your services.