Being a Good Mortgage Customer

Occasionally, someone will question my income as a mortgage broker, hinting, that I’m over-compensated and that I ought to cut my commission. In fact, there are times when what I do generates a higher income. On the other hand, there are times when I work hard and am paid nothing. The trick is putting enough paying jobs together so that I can end up make a living year after year. That’s been a hard job over the years in the real estate industry, which probably has one of the highest failure rates of any industry out there.

Higher income per hour is a common characteristic of any business where you get paid only when the deal closes. If it doesn’t close, you make nothing!

Attorneys have two pricing schedules. One is to bill for work per hour. Sometimes the client can’t pay the per hour charge, so the attorney can decide to take a contingency fee that is dependent upon winning the case and getting a monetary reward. The attorney may typically get 33% of the award. When you add up the hours spent on that case, he may make much more per hour off of settlement than he would have had he billed out the hours at his normal hourly rate. On the other hand, if he loses he gets nothing for the same work.

Real estate agents and mortgage loan officers are in the same boat, but with a slightly different twist. We get deals that look good but don’t work out for one reason or another. Sometimes this is because we don’t have a good customer. Real estate agents spend time taking people around to look at houses only to find out the customers are working with someone else in another area. That’s a waste of their time.

Every week, I get calls from people who want to pick my brain. I’m always willing to answer a question from someone who has bought my book. For others, I am courteous for a few minutes, but then it’s time to get serious. If someone wants specific advice on a transaction, I think that I ought to get compensated for it. After all, this isn’t a hobby!

People ought to get their advice from someone who will get paid to give it. If that’s not me, why should I help them? I only give serious advice to serious CLIENTS. Clients are those who will enter into a mutually beneficial relationship where each of us will accomplish our objectives.

Sometimes we take applications from people who look us in the eye, shake our hands, and say, “I want to be your customer.” Then they get our advice. But it turns out they were kidding and we never hear from them again. That’s not acting in good faith. In fact, I think it is cheating. Of course, they don’t care what I think because they believe we’ll never meet again. Maybe that’s the way they lead their lives. I, however, have a conscience that doesn’t permit being devious with someone acting in good faith and trying to help me.

The most important thing is not what your representative gets paid on your deal. It’s whether they EARN what they get paid by doing a terrific job for you and saving you money compared with other people you might have hired for less. Make the assumption that everyone you might hire will make the same income from the transaction. Your job is to decide which one of them will save you the most money or get you the best deal.

I recently had a $1,000,000 transaction where we busted our butts helping the client boost his credit scores in a very short period of time. We did it and, literally, saved him $7,500 over what he would have paid had we just said, “Oh, well. His scores aren’t quite high enough for this incentive compensation.” Believe me, that client was delighted and did NOT think I was paid too much.