Welcome to The Millionaire Loan Officer podcast with your host, Scott Hudspeth sharing tools, tips and strategies so that you can go from a mortgage loan officer to a millionaire loan officer. It's your host, Scott Hudspeth.
(00:28):Hello everybody. This is Scott hu with millionaire loan officer powered by mortgage marketing animals and the loan officer breakfast club. Super excited to have a friend of mine on the call who I don't maybe just, maybe he figured out the consumer direct purchase lead game. I dunno. I'm just saying maybe Andy, how you doing brother? Doing great, Scotty. Thanks for having me on yeah. Yep. Excited to talk with you. Excited to have you here, man. It was so awesome to see you at our event, our bootcamp down there, man, and meet a couple of your guys. That was awesome. So great dinner. I appreciate that. And man, if you guys wanna catch up with Andy at the next one I'm I think I'm gonna get him there cuz I think you had a good time with the last one. Soll yeah, we did tell a little bit about you man.
(01:16): Nothing like Dodge in 12 inches of snow in Indiana at the same time down in port, but great time. Yeah. And March would probably be not too bad of a time to be in Orlando. Right? Exactly. Yeah, Exactly. So Andy man, you've been in the business a long time and I think you were at one company, if I'm not mistaken for like 16 years or like a really long time, you've really kind of put your heart and soul into consumer direct leads. That's right. Scotty. so yeah, I I've been in the business you know, about 30 years and you know, historically, and I'm gonna say we, cause I got a couple business partners with me too, but literally we've been doing the directed consumer refi loan game for years and years and years and years. Right. A couple years ago, 5, 6, 7 years ago. We just got ultimately frustrated with the volatility of that refi business model and being so dependent upon the interest rate spikes and valleys with the macro economy. And yeah, we had talked about kind of making this migration over into the retail, you know, kind of going after agents and whatnot. But at the same time we had this expertise that we've developed through the years of, of really working leads. Yeah. Yeah. So over time, what we did Scotty is, and we've experimented with about anything that's out there in the purchase lead you and spent a lot of time trying to, to figure that out.
(02:50): And we've really settled now on a business model where we think we've got some really good purchase lead sources. And historically the, the challenge with purchase leads, right, is unlike a refi where, you know, when you, you initiate that application with the customer, you're gonna close that that transaction in about 30 days, we're in, if you move over into this purchase world, especially in the lead space, the buying cycle of that tumor can be you know, maybe 10% of 'em 30 days, but the majority of 'em can be, you know, our average cycle time is much closer to somewhere in the four to five months, right? When you blend everything together, some of them as short as 30 days, but some of 'em, you have to have a good file up system and it takes as long as a year to close a, a purchase loan, especially in a market like this, where inventory is so tight. Right. So interesting. Yeah. It's it's still always a challenge with the longer cycle time in the purchase game, but yeah, you know, if you've got a good quality lead source combined with good people who you've hired and trained, you know, is more importantly than anything else, a good follow up system to work with them. And then when you get into the purchase game too, you also have to be really good at, I mean, cuz I mean the market's change for now. A lot of times we're talking to the consumer before they even talk to an agent crazy. But after we get them engaged with the application, we gotta make sure that we figure out that relationship between our customer and the agent too. So either if they haven't talked to an agenting, yet we use this as a tool to introduce them to agents or if they are working with an agent it's super critical for us almost as important as taking a good application and figuring out a product and a program for that consumer.
(04:51): The second call has to be right, the agent they're working with because what's gonna happen if you don't is when they do find the house that agent's gonna influence that transaction to go to who they know I can trust. So we have to develop that relationship with that agent and the, and the consumer right away. So, wow. Yeah, it's been it's been a fun ride. It's been interesting. Yeah. But with a combination of good leads, a good follow up system and good people about 75, 80% of the we do as a group is in the purchase space. We still love refis, but I don't buy any refi leads. They all come from work and former customers or our sphere of influence within our network with, with our sales team. So,
(05:37): Well it kind of looks like the four to five month range. Like, you know, they say when somebody starts looking online, it's a start of a six to 12 month scenario, but you say four to five months. I mean, that's kind of like a construction loan really. I mean, if you take an app on a construction loan, it hasn't started, you're looking at six to eight months right now on a construction loan. So same, same thing. Plus you get to build a relationship with that customer and you get to, I mean, if you do it right with the right follow system, you're gonna get to know 'em on a deeper level to maybe tap into their friends, family and coworkers, which is beautiful. Right. That's exactly right. And it's been really fun to kind of partner with you and the rest of the group at mortgage marketing animals and take some of the things that we're doing in this lead based world and apply some of the cool methodologies that you guys are approaching and teaching with follow up systems. It's really helping us to augment what we're already doing in this lead world and, and make it much less of just a transaction, but much more like you just said a a relationship focused model. So
(06:40): Yeah. And just so you guys know Andy's part of the freedom club and he's got a group of people that are part of the freedom club and, and it's been such a pleasure to work with you guys. You got, I mean, you have an amazing team. So my question, like we have Dennis asking a question here on this podcast, which we don't usually get. It's kind of cool. What is the secret to conversion of leads to actual loan? What follow up system is he using? So that was a question that, that Dennis, thank you, Dennis, for being here just asked, what does that look like when you hire a loan officer for, is this a loan officer that's been doing lead only doesn't do any outside retail or how does that look with your people? That actually cause you got a huge team of people that take care of these leads for you.
(07:17): Yeah. We've got roughly about 30, 35 loan officers on the team. But the cool part about having this figured out with the, the lead world and the purchase is it really allows us to have an awesome tool to bring somebody on who today has been primarily focused on refi, right. Or yeah. Is new to the business in general. Yeah. Where we all know if you try to jump all the way into referral based partner business, that just takes a long time. Developing relationships just takes a long time. So we've got a good mechanism for somebody who wants to get into purchase, but they don't have to wait around financially to develop these relationships over. Right. So's a good way to put, I've literally end up Scouty with like three tranches of bankers on my team. I've got a tranche of bankers. That's either new to the business or recently came over from refi worlds or I've got some really experienced loan officers that frankly just don't really have an appetite for working with agents.
(08:28): And they just wanna re work direct to consumer leads. So I got this, this kind of lead lane of loan officers that work our leads on a daily basis. And then we've got your traditional retail loan officers, like the ones that you're helping me work with and coach and do some mortgage marketing tools where those guys are pretty much not using leads at all. They're pretty much exclusively retail loan officers. And then I have this whole group, this third group of loan officers, which is really a hybrid where they're working some of our leads, but they're trying to get to the point where they're much more retail loan officers than kind of doing a best of of both worlds and love it in the mean to, so, you know, kind of back to the, the question that got proposed, how do you convert?
(09:18): You know, one is you gotta have quality leads and you know, just like anything else, you gotta have good follow up systems. The majority of our follow up systems are in our, our CRM system, which is in accelerate for any, any of you that are familiar with that system. But it's also, it's no different than the retail group going after agents where you ultimately have to make it a numbers game too. The metric we usually follow is, you know, especially in that lead world is about 20 to 30, you know, somewhere in that range, depending upon the strength of the loan office, internet experience, about 20 to 30% of what they have prequalified in their pipeline should go under contract in any given month. Got it. Right. So if you got 20 prequalifications out there and you're more towards the top end of that, you should be able to close six new transactions this month, right? Not all 20 now, 20 of those deals are gonna gonna find so somewhere between the metric is somewhere between 20 to 30%, depending on the experience of a loan officer. Okay. Of what the, so the key is let's get a prequalification pipeline that's 20, 30 deep and you have a good follow up system to work with those pre customers to get it done. So, you know, back to his question, there's no like secret conversion sauce. It's a combination of quality leads, great follow up systems and flat out numbers. Right. Got it. So,
(10:48): You know, like a lot of people struggle with leads, right? Like a ton of agents that I talk to, everyone has a lead source. I think they do it for a little significant it's like I got a thing coming in. Will you buy this? You buy that. Do you know about the percentage of like how many come in to how many actually turn into a, you know, a person that's sitting there waiting to buy or looking for a home? You know, it, it really, really, really, really depends upon that lead source. Right? Like I shared with you, we got this extensive, we partnered up with Zillow for years and years and years and years, but back to even somewhat in the refi days. But you know, when they really launched things that we were trying to figure out this purchase approach to things, they were a logical partner. Cause you know, we get leads and they, they got leads. So we've worked with them in that space. Like the leads that we get from Zillow, a good conversion rate from lead to applications in that five to seven range.
(11:43): Okay. Being realistic now I've got other lead sources through organic stuff that we're doing out on Google and Bing and out on the web with some of the other product, there's some other lead sources that have conversion rates way higher than that. But there's also a greater expense to get those type of leads too. Right. So For sure, for sure. Yeah. Awesome. You know, I think the secret sauce in this is follow up. I think that, you know, and I have a good buddy of mine in grand rapids who does this same stuff, who, who just knocks it out of the park, but his secret sauce is he, it doesn't get cold. It's so warm. It's within minutes of that league coming in, do you have something set up to where you have a huge team? Is it a three minute, two minute, one minute when the league comes in, is it a live transfer or like what happens with that type of lead that comes in? Cause I know a follow up is on every single lead chart and that's the number one sauce.
(12:36): Yeah. So we use some of the old tools that we had in place from back in the refi world to do exactly what you're talking about. Right. Some of these metrics have never changed. 80% of who takes that first application with the customer is gonna close that loan. Right. So yeah. Speed is absolutely critical and important. So as the lead comes into our CRM and our system, the system actually automatically dials it for us. Wow. And does kind of a ring all to all of our available bankers. Right. Geez. So if, if the customer picks up that phone, it's gonna ring anybody who's available in our group and try to match those amazing them right away. And then we've got just basic rules built into our CRM on how frequently we're expecting that lead called, especially within the first couple days while they've raised their hand and shown an interest.
(13:32): It's just even in the purchase world, we all know back to the refi days, the first person talks and gets the application they're off the running. Yeah. Yeah. We're I mean, if you think about these leads that we're talking about specifically, like the Zillow leads, they were just shopping on Zillow, looking at homes and clicked on the, how much do I qualify for, but right. So they're in the buying mode, but you know, it's anywhere. I mean, it's just a longer sales cycle, so yeah. Yeah. It's getting the application quick. Some of those games just haven't changed. So yeah. And you've been in the business 30 years, man. I appreciate that. You have both sides, you have a lead side, you have a retail side, you have a middle of road side. What would you tell somebody that is in the retail side, knowing you've worked with that side, you know, of like going after ages, what's some of the things, you know, now that you didn't know then like, you know, we don't know what we don't know that you would tell somebody that's maybe struggling at that 1, 2, 3, 4 loans a month that man, I just, man, Andy, I just can't get past the hump of, you know, making this thing a true, you know, and actually three, four loans is pretty successful. One or two, knowing what, you know, now,
(14:35): One of the big things that were tr you know, our group has been traditional loan officers for a long period of time where we have been very used to the loan officer handles that file, you know, kind of from that application point, all the, you know, regardless of whether it's purchase or refi all the way up until they've collected all the documentation and passed the Baton over to processing and underwriting. One of the big things that's really helped us propel the business without having to add an enormous amount of loan officers and make it into much more of a, I hate using the word a, a sweat shop where you're only closing one or two loans per loan officer. That's really not our approach where we want to have a limited amount of really quality loan officers and build pods or teams underneath them. So partnering with you guys and the methodology, the mortgage marketing animals we've in introduced the loan officer assistant role. That just was not part of our culture and our systems up until a year ago. So yeah, it's made a big difference where we're literally just able to have the cut capacity of doing so much more with our good people, because we're keeping 'em focused on business development. So big kudos you guys for helping us remove the blinders and and figure out that secret sauce. It's just making a big difference.
(16:06): I appreciate that, man. I appreciate that. You know, we got loan officers who close a million dollars a month that now out in close two and 3 million a month, because we got 'em focused 80% plus their time on business development and somebody else is doing the task work of working with the consumer. It's just made a big difference. So it's so amazing to see when I first started working with you guys, you know, like Zach and Aaron and, and Nick, how the, the stress was more business know. No. And now when you get 'em that loan officer assistant, like they're all going, I can handle, I can handle two, two and a half now, you know, and Zach's got a caller coming. I mean, it's just a, it's just so cool to see 'em let go and their confidence and the, their frequency change. It's just so cool to see that. So congratulations kudos to you, man, for thank you. You, you know, saying, Hey man, keeping 'em on the sales floor, it's a big deal. Like it's not what they have to do. It's who needs to do it. And that's just a huge message. So what's next for you, man? Here we are. 2022, just went through a crazy two years. Are the leads the same, getting worse, better like purchase. We all know that purchase is gonna be the name of the game the next three years. Like that's the forecast you setting your sounds like you're setting yourself up really good. Both have this side, that side in the middle, like sounds like you have an amazing, everybody wins type format, anything in the works to, to plan on taking this thing to another level.
(17:26): Yeah. We're really looking to add some additional quality people to our teams, right. So we know what's gonna happen with the rising eight environment in the, in the refi business. Right? So we're looking for quality people that have been literally focused on on doing refi business for the last couple years. Gotcha. But they're, they're, self-motivated driven and wanna figure this purchase world out. So recruiting good quality people and adding 'em to our team is a, is a big focus because, you know, we think that skillset aligns with what we've got, you know, figured out in this yeah, this, this lead world, and we've got a good platform and infrastructure to take somebody who's used to working directly with that consumer teach 'em to purchase business and help them. Ultimately even if, if they have interest in it, they, they can just work our leads too. If they if they're passionate about just doing direct it to consumer. But if they have interest in it also teaching 'em the retail business to, you know, set up referral partners and and, and get that business going. So the, to answer your question, the biggest thing is find an additional quality people. Good. We know rates are going up the additional business this year. Isn't gonna come from refis. It's gonna come from from doing more purchases, with more quality people on the team. So
(18:43): Love it. And helping your people do more just themselves by getting stuff off their plate is gonna be a huge thing for you, cuz they're already in it. They're already in it, man. They're already doing really good. So it's gonna be exciting to watch, man. I really appreciate you being part of the freedom club and everything you bring to us. I know Carl was intrigued when we talked to him at the table that one night about your lead success that you have with purchase leads. So it's I'm sure that someday you're gonna be on stage, man. I don't, you know, so We'll see how that goes, man. Appreciate you. I look forward to seeing you at the next event, man. Everything you do is just awesome. Honored to call you a friend business partner and look forward to what happens in the next 12 to 24 months, man. It's gonna be exciting. Thanks
(19:20): Scotty. Appreciate your time. It's been great. All right guys. Thanks so much for listening to millionaire loan officer powered by mortgage marketing animals on the loan officer breakfast club, everybody be safe. Get out there and listen, make some calls, get some business and we'll see you on the web. Take care everybody.
I'm a Millionaire Loan Officer.
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