Real Estate Finance Forum
You Are the REFF~~Game On!
"To achieve great things you need to move out of your comfort zone -- and stay out of it."
This Issue:
-Improving Credit Scores
-Is Selling Simple?
-Who is looking after YOUR clients?
-5 Ways to say Thank-You
-Book Reviews, Brian Tracy and Loral Langemeier
Coming Soon:
-Book Reviews, Advanced Selling for Dummies and
Greed, Fraud & Ignorance: A Subprime Insider's Look at the Mortgage Collapse
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Improving Your Credit
How to add points to your score
Most people are not sure exactly what a credit score is or what factors are used in determining what the score is. Unless you work in finance or have researched this information it’s unlikely that you fully understand how credit scores work or how they are calculated.
Let’s begin with the basics:
The use of a credit score helps lenders quickly assess the risk of lending you money. It’s more of an algorithm in that it is a structured formula of calculation, so it’s consistent and fair for every consumer. The scores do not discriminate.
Credit bureaus take dozens of factors into consideration when calculating a score, each bureau may calculate it a little differently but here are a few facts they consider:
· Your total debt – and this is only your debt and debt you co-signed, NOT your income – credit bureaus do not use your income as a factor for the score
· Types of accounts, i.e. revolving debt like credit cards vs. auto loans or mortgage loans
· How many lines of credit you have open and available credit vs. amounts owed
· Payment history – do you only pay the minimum payment each month? Are there any collection accounts?
· Number of late payments
· Age of accounts
· Multiple credit inquiries spread out over time, for different types of credit
Note: If credit is denied, the lender or organization you applied with is required to provide you with the most significant score factors that caused the denial.
Score ranges are from 300 to 850 with a national average around 692, according to Experian. That said, prime borrowers fall in the 680 and up category while subprime is below 680. (Hopefully this won’t change due to the recent subprime fallout.)
Maintaining a high score is easy as long as you don’t abuse it. Experian suggests you follow these guidelines to keeping a healthy score:
· Pay bills on time
· Keep balances low
· Apply for and open new lines of credit only as needed
· Pay off debt instead of moving it around
These are basic rules of thumb to follow.
And contrary to popular belief, not having any credit can result in a low score. Let me explain: When you do not have a credit history there is no way to assess whether you are a risk or not, of course they will err on the side of caution.
Suppose you don’t want to use credit – it still makes sense to open an account and use it a couple times, pay it off and leave it open. This shows fiscal responsibility and can increase your score.
Which leads us to the question: Should you close accounts that are not being used? Not necessarily. In the equation of available credit versus amounts owed you should show a higher ratio of availability to amounts owed – a revolving credit account left open with a zero balance could help increase your score.
And it’s better to spread debt equally over a few credit cards than to have three with zero balances and one that’s 80 percent full.
Now, what can you do when a credit report has blemishes? First things first, get a copy of your credit report and request your credit score when ordering.
Reviewing what is on your report is the only way you’ll understand your score. There could be errors in that report causing a low score.
By law, you can dispute mistakes or outdated items for free. Both the consumer reporting company and the information provider (lender, credit card company, etc.) are responsible for correcting inaccurate or incomplete information in your report.
For example, if there is a late pay on an old credit card and you don’t recall making a late payment, you can dispute it and the credit card company must respond within 30 days or the credit bureau has no choice but to remove it from your report. From what I hear, lenders who no longer hold an account are apt not to respond, thus, the credit bureau is required to remove it from your report.
Other issues such as collection accounts should be addressed as well. This might involve contacting the collection agency and negotiating a pay-off. Collection accounts are purchased for pennies on the dollar so it might be possible to negotiate a lower pay-off AND an agreement that they take the collection off of your report altogether.
There are credit repair companies out there that can help but there is nothing they can do that you cannot, so be careful of those who promise to repair your credit or get legitimate blemishes taken off for an upfront fee.
To do it yourself all you need to do is a little research. For more information on credit repair and to see a sample dispute letter, visit: http://www.ftc.gov/bcp/conline/pubs/credit/repair.shtm
So, review your credit report ahead of time when you are preparing to apply for a loan or line of credit and fix what you can. A bad credit score will not haunt you forever. Over time and with timely payments you can bring your score up to prime.
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Is Selling Simple or Complicated?
©Tessa Stowe, Sales Conversation, 2008
I'd like you to take a moment right now and, before you continue reading this article, decide whether you think selling is simple or complicated? Please now read on.
Before I start to specifically talk about selling, I'd like to first discuss 'complicated' versus 'simple'.
In the past we have been taught to respect and value the 'complicated.' Whole industries have cropped up to make complicated products, to convince us we need these complicated products and to then help us use these complicated products.
On the other hand, in the past we have not respected or valued the 'simple'. The simple is seen as common sense and by definition, since it's 'common' sense, it's perceived value is diminished.
The absolute irony is that to make something complicated is simple and to make something simple is complicated! To make something simple requires a lot of effort and skill. To make something simple often requires a lot more time and expense than to make it complicated.
Recently people have started to demand the simple in their lives and are seeing the value in simple. Simplicity now sells and people are even starting to pay more money for the simple.
Now let's come back to selling and whether it is complicated or simple.
I think that not only have we been convinced that selling is complicated but we also use the perspective that selling is complicated as an excuse. Let me explain further.
We have been told that selling is complicated. We have been convinced that:
• As the products we are selling get more and more complicated, the selling of these complicated products must by definition get more complicated as well.
• As the number of people involved in making a single purchasing decision increases, the more complicated the selling becomes.
Since we've been convinced that selling is complicated, we believe we need complicated sales processes and sales tools in order to sell. As a result, lots of companies have appeared over the years to offer us complicated sales training and complicated sales tools that we believe we need because we believe selling is complicated. These companies make a lot of money from our beliefs and their very existence relies on us continuing to hold the belief that selling is complicated.
Complexity provides us with many additional sources of excuses and gives us the ability to cover up our failures. If you are selling complicated products, you can use the excuse that a prospect failed to see the value because the products are so complicated. If it is taking a long time for your prospect to make a decision, you can make the excuse that selling is complicated as there are lots of people involved. You could go on and on making excuses because selling is complicated.
I would like to propose that selling is not in fact complicated; it is in fact quite simple.
Even if the product you are selling is complicated, so what? You are not selling a complicated product; you are selling a solution to a problem. Your selling strategy and focus is around the solution to your prospect's problem and not around your complicated product.
Whether your product is complicated or simple should not be relevant to the sales conversation.
Also, even if the number of people involved in the buying decision grows, you will still be having sales conversations with individuals. The only difference when many people are involved is that you will be having sales conversations with multiple people.
These sales conversations will be identical with respect to the process and principles. What you do with the information gathered from these sales conversations is identical no matter how many people are involved in the buying process.
If you are willing to take on the belief that selling is simple and you are prepared to give up the excuses you can use if you believe selling is complicated, then what is your next step?
With respect to what's next, I recommend that you look at the sales process you are using and if it is complicated, replace it with a simple sales process.
Commit to finding and learning a simple, end-to-end, sales process that focuses on selling solutions to problems (as opposed to selling products) and which works whether one person or many people are involved in the buying decision. If you do, you will naturally be a lot more successful at selling and you will enjoy it a lot more too.
Selling really is simple. Simple sells. Try it and see.
Tessa Stowe teaches small business owners and recovering salespeople 10 simple steps to turn conversations into clients without being sales-y or pushy. Her FREE monthly Sales Conversation newsletter is full of tips on how to sell your services by just being yourself. Sign up now at www.salesconversation.com.
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Are Your Clients JUST Satisfied?
Left alone, loyal clients find new agents
by Tom Ninness
You have the perfect loan, the perfect clients, you make all of the dates on the contract and you even go to the closing. You’ve created a “non-event” for the client so why wouldn’t they come back to you?
There is truly a difference between creating loyalty and just having satisfied clients. After reading and pondering what I learned from the book by Jeffrey Gitomer called, Customer Satisfaction is Worthless…, has changed how I look at my clients.
Tupper Briggs, one of the most dynamic real estate agents in the country, has had up to 73% of the listings in the town of Evergreen, Colorado at a given time. So, I want you to pretend that you’re a Realtor® and your client has just purchased one of Tupper’s listings. You, as the selling agent did a wonderful job. At the closing, you hand over the keys to your clients, congratulate them and then passively you mention for them to send you some referrals. Well, Tupper knows an interesting fact: 80% of his competition does not stay in touch with their past clients. So here is what Tupper does after closing.
1. A few days after closing when Tupper knows that your clients have moved into the neighborhood, his wife delivers to their home a wonderful basket of baked goods and welcomes them to their new home.
2. A week later, Tupper will be calling your client’s and re-introduce himself to them. He’ll ask questions on how the move went, have they had a chance to meet the neighbors, etc. Then comes the big question and here’s how goes. “Let me ask you a question, is there anything wrong with the home, or is something not working that you thought was during the inspection?” Tupper will get something out of the client that could be as small as a sprinkler head to a major repair. So let’s pretend that two zones are not working on the sprinkler system. Tupper’s response is, “Your problem is now my problem. I’ll have my handy man contact you to get it fixed at my expense.” So what happens next?
3. Tupper will now put your client on his mailing list, he will call them and check up on them about four times a year, he will invite them to his summer picnic and holiday party, and guess who’s going to get the listing when the client gets ready to move? Tupper!!
Protecting Your Turf
As a mortgage banker, we fund the loan, but we don’t service the loan. Every month, the servicing company tries to entice our client to refinance with them, to take out a HELOC with them; it’s so simple and easy.
Can we be assured that our client will come back to us, or at least give us a chance to do business with them again? I believe you can by the following steps.
1. The first loan transaction is the most important. “You only have one chance to make a first and lasting impression”. The superior service that we deliver must be consistent so that our client feels confidant to come back and referring their friends, family and co-workers. Remember, you can’t WOW them until you’ve at least satisfied them.
2. Did you WOW them with the experience the first time? We do special “Congratulations” and “Thank Yous” during the loan process. One of things we do when our client’s contract gets approved is sending them Tag-A-Room stickers for their moving boxes. They are really cheap (around $7.50), but it’s a surprise that they weren’t expecting. Go to www.tagaroom.com and check out the site.
3. Form a net on your client after closing. I follow a similar follow-up system as Tupper does.
· After closing, I send another small gift, which is a magnetic letter opener that I can put my card in. I write a short note thanking the client again and please use the new letter opener as my gift to them to get ready all the new mail that will coming to them.
· I then follow up with a phone call to see how the move went and to see if I any of their contact information has changed because of the move. I then go into asking some very important questions.
“Mr. Buyer, I need to know based on the service that we provided, would you do business with us again when you purchase your next home or need to look into refinancing?” Hopefully, they say yes. I then explain to them how I’ll be staying in touch with them through my mail/email, phone calls to see how they are doing and to let them know when I will be doing special events such as picnics, real estate investment classes and seminars. I remind them that the servicing lender is going to entice them to do their business with them but make sure that you call me first when their mortgage needs arise.
· What if they say No or maybe? First, never argue with the client or try to justify why things didn’t go well. I’ve learned from experience that I might win the battle but I won’t win the war.
· After the conversation, I will send a letter of apology and a gift certificate for around $50.00 and ask them to accept this with my apology. I can tell you that 80 % of “Just Satisfied or Dissatisfied Clients” will respond positively and allow me to stay in touch with them— and some of them have become my best referral partners.
Final Thought
Creating loyal clients is a must for repeat and referral business. They will keep coming back, refer their sphere, and bring stability in your business even when the market slows down. Make sure you stay in touch with your past clients or your competitor will take over your turf. Loyal clients already know and trust you. They will not be easily swayed to go with someone else.
Loyal clients become friendships because you have stayed in touch with them. Loyal clients are created over time not just from one satisfying experience.
Tom Ninness, Regional Production Manager for Cherry Creek Mortgage and President of Summit Champions, Inc. Tom is also the creator of the “90 Day Journey for your Sales Success.” To learn about all of Summit Champion’s products, tools, and strategies go to www.summitchampions.com or contact Tom at information@summitchampions.com
5 Cool Ideas for Saying Thanks
1. Saying “thank you” is a lost art.
Listen for those exact words when you buy food and clothing from people. The sales person is far more likely to say something like “have a nice day” or “here you go” or “you’re all set.” Set yourself apart from other folks by actually saying the words “thank you.”
2. Put it in writing.
Thanking someone via e-mail is better than nothing, but saying “thanks” via a personal, handwritten card is special. Always hand-stamp the card; never use a postage meter. I’ve been using the United States Post Office’s superhero stamps. It’s been fun matching a superhero to the card’s recipient.
3. Thank you cards work at work.
Stash a bunch of 5 x 7 inch thank you cards in a desk drawer. You can use company cards or have them printed with your name on the front. Keep the inside blank so you can personalize each message. I travel with pre-addressed, pre-stamped “thank you” cards and often mail them to my client from the airport before I fly home.
4. Thank you cards work better at home.
If you send an employee a “thank you” card at work, it ends up in the garbage pretty quickly. If you send it to the person at home, it’ll end up on the refrigerator. For a year. Mention the person’s family in the note and it will stay posted for two years.
5. Praise in public and private.
An antiquated leadership axiom states, “Praise in public and criticize in public. I recommend praising in public and private. Become known a leader who says “thanks” and people will try to transfer to your department.
Michael Angelo Caruso is the author of the 5 Cool Ideas book series and the FastLearnerAudio series. To receive his complimentary "5 Cool Ideas" newsletter, simply send an e-mail to: 5CoolIdeas@MichaelAngeloCaruso.com.
1. Saying “thank you” is a lost art.
Listen for those exact words when you buy food and clothing from people. The sales person is far more likely to say something like “have a nice day” or “here you go” or “you’re all set.” Set yourself apart from other folks by actually saying the words “thank you.”
2. Put it in writing.
Thanking someone via e-mail is better than nothing, but saying “thanks” via a personal, handwritten card is special. Always hand-stamp the card; never use a postage meter. I’ve been using the United States Post Office’s superhero stamps. It’s been fun matching a superhero to the card’s recipient.
3. Thank you cards work at work.
Stash a bunch of 5 x 7 inch thank you cards in a desk drawer. You can use company cards or have them printed with your name on the front. Keep the inside blank so you can personalize each message. I travel with pre-addressed, pre-stamped “thank you” cards and often mail them to my client from the airport before I fly home.
4. Thank you cards work better at home.
If you send an employee a “thank you” card at work, it ends up in the garbage pretty quickly. If you send it to the person at home, it’ll end up on the refrigerator. For a year. Mention the person’s family in the note and it will stay posted for two years.
5. Praise in public and private.
An antiquated leadership axiom states, “Praise in public and criticize in public. I recommend praising in public and private. Become known a leader who says “thanks” and people will try to transfer to your department.
Michael Angelo Caruso is the author of the 5 Cool Ideas book series and the FastLearnerAudio series. To receive his complimentary "5 Cool Ideas" newsletter, simply send an e-mail to: 5CoolIdeas@MichaelAngeloCaruso.com.