By the word “mortgage” We used to have begun only recently: a relatively new concept for the Russian practice. If the mortgage housing is becoming more common, the commercial real estate mortgages – has only sporadic cases.

Mortgage commercial real estate or commercial mortgage (mortgage business), is widespread throughout the world. Western experience shows that with sound operation of commercial real estate – rental of premises for offices, shops, business services – its yield is comparable to any other area of small business and allows the use of mortgage loans.

The essence and conditions of commercial mortgages

Mortgage loan is granted for the purchase of non-residential premises: warehouse, office, etc. The meaning of the mortgage is to lend the purchase of commercial real estate under the same pledge. In contrast, housing loans, commercial mortgages are short term loan, but rather high interest rates.

Typically, the annual rates of commercial real estate mortgage loans range from 12 to 16%, mainly in the currency. The term of the mortgage real estate – a maximum of 10-12 years and the most common term – 5 years. Borrower must make an initial contribution of 25-40% of the value of real estate. In doing so, the client must be profitable and a minimum balance of the year on the market.

The legal nuances of commercial mortgage loan

The scheme of the commercial mortgage is similar to non-residential mortgage housing: there are the same procedures for assessing the borrower and the facility, the requirement of the initial deposit. But there is a fundamental difference – the law does not allow companies to draw up a mortgage on the property until the conclusion of the sale. The object must first acquire and then you can pledge to get the money.

An important legal aspect of commercial mortgages – the registration of ownership of non-residential premises, while mortgage encumbrance Federal law does not provide. The Treaty on mortgage commercial real estate is subject to general rules of the Civil Code of the Russian Federation on the conclusion of treaties, as well as the Federal Law “On Mortgage (mortgage). According to paragraph 1 of article 9 of the federal law in the contract of mortgage must be given to mortgage his assessment of substance, size and term of the obligation secured by a mortgage.

Who will benefit from the commercial mortgage?

Participants in the commercial mortgage market agree that the development of the mortgage business is constrained primarily loopholes in the law. However, it is not clear, and someone who will be the borrower, what is its quality. Reliable stable companies can take to acquire an ordinary commercial real estate loans on bail of any property, they do not particularly need a mortgage. And if the company has no collateral or banks do not consider it possible to give her credit based on the evaluation of such a company – why would need a mortgage borrower?

It is for this reason that Russia mortgage commercial real estate still is, essentially, for large companies. For small businesses do not have sufficient collateral. On the specific risks of small businesses overlap problem opaque commercial real estate market.

Commercial Mortgage Scheme

So, the existing legislation in respect of the mortgage business is not perfect. It defines and possible arrangements for the mortgage lending business. According to the law “On mortgage” for commercial real estate, as opposed to living quarters, is an entirely different mechanism of registration and registration of collateral. Therefore, the market has developed a number of ways to carry out this kind of transactions, enabling them under current legislation.

Scheme I

The conclusion of the sales contract. The seller receives a portion of their funds from the buyer, as well as the guarantee of a bank. Then the registration of ownership of the new buyer. Further, the registration of a collateral agreement, followed by the issuance of credit and final settlement. This scheme experts called the most complex and lengthy.

Scheme II

The buyer pays for pre-contract owner (the seller) of its own funds, and the seller receives from the Bank’s obligation to pay the missing funds in the event of registration of mortgage. Followed by registration of collateral on a bank and registration of all documents on the transfer of ownership of the new owner, that is, the buyer (the conclusion of a contract of sale), after which the seller receives the full amount, but registration is taking its course.

Scheme III

Realtors latest scheme called “Ransom entity.” A company, which is made out of real estate object (entity). Then the borrower to buy shares of the company by paying the loan. In doing so, the company arranged for the property.

Leasing – an alternative to commercial mortgages

According to experts, a good alternative business imperfect until the mortgage can become a commercial real estate leasing. In this case, the leasing organization – an analogue of a cooperative – gives credit for the purchase of the property and is the owner of the facility until the loan is not repaid. One of the advantages of leasing is that his arrangements clearly stated in the legislation. On the other hand, in case of bankruptcy leasing organization all of its property may depart for the debts of third parties, such as banks.

In any case, the risk is unavoidable. Banking experts advise entrepreneurs themselves to influence the terms of lending. According to most experts, the most urgent problem hindering the development of commercial mortgages, the low culture of the financing of small businesses. Mortgage becomes reality when the small business “Light”. The lower the tax culture of small business, the worse the conditions of mortgage lending for the same – the withdrawal of real market-mortgage business.

All of the experts are referring to our current mortgage problems as a mortgage crisis…a much needed adjustment…and even a mortgage meltdown. As might be expected, there’s a lot of finger pointing and blame being levied on everyone connected to the mortgage industry.

Most of the Mortgage Professionals that are working today have never experienced a really “tight” mortgage market. It seems as though interest rates have been low forever, the recent refinancing boom benefited everyone (including our current critics) and, a huge amount of money has changed hands as a result.

Now don’t get me wrong, the mortgage business was never easy. To be really consistent and successful at originating mortgages always did require dedication, purpose and the proven systems to make it work. Over the last few years, competition has been keen as countless numbers of new originators have been attracted to the business.

But, the handwriting is on the wall. Each day brings new changes. Lenders are retreating and even leaving the market place. Loan programs are being revised and even eliminated. Credit requirements are being reviewed, changed, and altered to reduce the risk to the lenders.

When dramatic market changes happen as they are now, many people are taken by complete surprise. On the other hand, if you have prepared well, paid attention, followed some if not all of the following tips, you can do business in any market…the best and the worst.

1. Re-state your goals and set up a schedule to accomplish them. Break all of your activities down to the daily level and allocate time for each function. Schedule a block of time to prospect, return phone calls, check and return email, send thank you cards, and contact members of your database.

The more detailed your schedule, the more effective you will be. The more you are dedicated to your schedule, the more successful you will be in the mortgage business.

2. You must prospect daily. Prospecting and originating loans is how you bring in business. You must never stop prospecting. You can even pick your origination method. But, you must schedule at least one hour every day for prospecting.

Prospecting is the most important activity that you can do to overcome a really “tight” mortgage market. If you do it well, you will continue to be successful in the mortgage business. Do it not, and you will fall by the wayside and become a mortgage drop out.

3. Target or re-target your mortgage prospects. Although there’s probably still a mortgage loan for just about everyone, you may want to consider changing your marketing so that you are working with mortgage prospects that are easy to place.

Even if you’re somewhat desperate for business, is it really worth your time and effort to spend time with clients that will consume all of your time and disrupt your schedule. Make life easy for yourself and target the prospects that you really want.

4. Define your mortgage market and purpose. You can call it a marketing philosophy or a specialty or a marketing niche. Whatever you want to call it, you can specialize in super qualified prospects.

Most mortgage niches can and will generate qualified prospects. You just need to ask better questions, seek more exact information, and better qualify each prospect on your terms so that they fit the profile that you have set as the ideal customer. Refer those that don’t fit the profile to others and you’ll prosper.

5. Develop your personal mortgage philosophy. This is what separates you from the hundreds of mortgage people working your marketing area. It defines your market and it defines you.

This is what’s unique about you and your mortgage business and what separates you from everyone else. By defining your mortgage philosophy you help confirm that your business is in deed on track.

6. Be positive and stay positive. Every successful mortgage professional needs to perform a little attitude check. Do you really enjoy the mortgage business? Do you listen to your mortgage prospects and customers? Do you enjoy working with people?

Our prospects and customers can quickly discern any kind of negative attitude, your lack of concern, the glassy stare, or the mixed messages you may be sending. People do want to trust you…make sure you are conveying the right attitude to allow them to do that.

7. Don’t forget your database. Market more to your database, not less. They have already raised their hand and have accepted your marketing message in the past. This statistic has not changed: 15% to 20% of your database will make a mortgage decision this year. You can earn your fair share of this business by maintaining contact with your database every thirty (30) days.

Here’s an interesting fact for you to consider: For every thirty (30) days that you avoid contacting your database you will effectively loose about 10% of your list. Need we say more?

In summary, by concentrating your efforts on these seven points, your business will improve regardless of the market conditions, you’ll reach all your goals, and you’ll be in complete control of your business and your life.

6 Postcard Marketing Tips That Can Improve Your Mortgage Business

If you’re currently involved in a postcard marketing campaign or just thinking about starting one, here are some significant tips you can add to your knowledge base that will help make your mortgage marketing efforts a real winner.

1. A black and white postcard always gets a better response than a full color one. Yes…there are experts in the field that recommend black and white versus color. Here’s the logic: color can many times be distracting to the reader especially when it’s crammed into a relatively small area like a postcard. Most color cards are just too busy resulting in your mortgage message being lost in the shuffle. Leave the color cards for the biggies that can spend tons of dollars to make color work effectively for them.

By using black and white you can drastically reduce your postcard printing costs. Instead, use text boxes in your layout and incorporate shadings and shadows to highlight important sections of your offer and your advertising message.

2. Repeat postcard mailings are an absolute must. So many times I have been told the following: “I tried postcard mailing once and it didn’t work for me.” Well, they’re right, and it probably won’t work well for them the second or even third time.

Why are repeated mailings and contacts so important? The numbers provided by National Sales Executive Association remind us why:

2 % of all sales are made on the 1st contact,

3 % of all sales are made on the 2nd contact,

5 % of all sales are made on the 3rd contact,

10 % of all sales are made on the 4th contact,

80 % of all sales are made on the 5th thru 12th contact.

Need I say more! If you’re not willing to do a campaign (multiple mailings), then don’t do a mailing at all. A one shot postcard mailing will not change your mortgage business, your bottom line, or your life in any way.

Sorry to be so harsh, but there are some things that just must be said!

3. Never allow an outside company to physically mail your postcards. A couple of years ago I contracted with a company to provide a mailing campaign for me to include the actual mailing service.

On the advice of a friend, I had embedded names and addresses of friends throughout the list to check the deliverability. This is a common practice in the industry and is called “salting the list.” When you rent a list (you never own a contracted list) they “salt” the list so that they can be sure that you only use the list once.

To make a long story short, over 50% of my salted addresses never received my mailing. Did my mailing company charge me for the entire contract including postage and only deliver half of it? There’s just no way to know. The Post Office is always the easy and convenient culprit but, there’s just no way to know for sure.

Always maintain 100% control of the most expensive part of your postcard campaign!

4. Postcards are read 99.9% of the time. I’m really sorry to be the one telling you this…the Postman (Postperson if you prefer) is reading your postcard…and, so is everyone else that touches that card. In fact, your card is being read even if it’s a lousy one!

If you don’t believe this fact, test it yourself. The next time you receive a postcard just throw it away without reading it. It’s almost impossible. The first thing you do is check to make sure it was addressed to you and then you flip it over to quickly read the message. Or, you read the message and then flip it over. Either way it’s like a magnetic…people need to read it. And, the really great thing is…there’s no envelope to open.

With a postcard, even if they throw it away, they already saw your message regardless of whether they think they did or not. They saw it enough to throw it away, didn’t they? The fact remains…junk mail gets thrown away. And postcards are really junk mail to a lot of people.

This fact is…although they may be junk mail to some people…postcards get read no matter what…even if they get thrown away without fully understanding them…postcards do get seen. It’s really the only advertising medium that can’t be ignored.

5. Always run a split-test with your postcards. Yes…every market is a little bit different. What works in one area doesn’t necessarily work for another. Change the headline or even the message and send two separate mailings.

Measure the response you receive and compare the two mailings. Keep track of your results and use those results in subsequent campaigns. Your mailings will continue to improve and so will your mortgage business.

Continuous testing and experimentation should be an integral part of your direct mail program.

6. You can grow a business using only postcards. Many years ago I started a company using postcards as the primary marketing method to employers. The business idea: provide company recognition to employees on their birthdays and hire anniversary dates using…you guessed it…postcards.

The company was sold within two years with over 200 customers (including one Fortune 500 account) helping to fund my next project.

I love postcards and the business they can generate. I still use them in my mortgage business today. Give them a good chance, and they’ll work for you too! Follow these tips and your postcard marketing program will be in a class by itself.

Little things make a big difference. That’s true in marriage, parenting, and in marketing yourself as a mortgage professional. Too often as entrepreneurs we get caught up in the “thick” of “thin things” and we lose touch with what really drives success in our business.

In the little time we have together I want to remind you (or surprise you) of eight deadly marketing sins that mortgage professionals commit that could be crippling your business growth.

Sin #1 – Working “In” Your Business Instead of “On” Your Business

I was working with a consulting client recently who was in a sales slump. I decided to perform a very simple diagnostic. I simply asked him to send me detailed list with all of their activities for the next three days, email them to me, and then give me a call back. He did his homework and I received email listing all his activities and how much time he spent on them.

With an immediate glance I could tell exactly what his problem was – - he had forgotten what business he was in. After reviewing his activities it was clear that he was in the “putting out fires” business because that’s where most of his time was spent. Rather than working “on” his business he was working “in” his business.

This mortgage professional (and you) should be spending more time working “on” your business doing things like “planning and marketing,” which have a higher long term payoff.

In his popular book, “7 Habits for Highly Effective People” Stephen Covey hammers this point home using his famous “Time Management Matrix.” Dr. Covey emphasizes that too many business owners spend their time doing “urgent – but not important” activities when they should be spending their time on “non-urgent- but important” activities.

Non-urgent – but important activities, such as planning and marketing, generate continued and sustainable long term growth.

Sin #2 – Failing to Create and Use a Marketing Plan

Last year I was speaking at a national mortgage conference and had about 100 mortgage professionals in the room. I asked the crowd to hold up their hands if they had a current marketing plan that they use and refer to on a consistent basis. Only three hands went up!

Even I was shocked. Studies have shown that small businesses that create and consistently use marketing plans experience an average of 30% higher sales than their competitors. Wouldn’t you like to increase your sales by 30%?

Here are a few tips to help you create your marketing plan.

Tip # 1 – Start your plan choosing a specific niche market to focus your marketing efforts

Tip # 2 – Identify your niche market’s problems, fears and frustrations

Tip # 3 – Create a marketing message that offers free information (i.e. special report) that is relevant to your to your target market

Tip # 4 – Break your plan down into mini-plans such as “referral marketing plan”, “advertising plan”, and “postcard marketing plan.”

Tip # 5 – Block schedule 30 minutes every week to review your plan.

Sin #3 – Failing to Implement Systems
A system is a business process that generates predictable, consistent, and replicable results day after day. If you want to see a good example of a system simply visit a fast food franchise like McDonalds or Wendy’s. Notice how they do the same things, the same way, every single time.

Unfortunately, most mortgage professionals never take the time to “systematize” their business, which results in duplication, waste, chaos, and ultimately lost sales. Sin # 1 is partly to blame for not getting around to creating and implementing systems.

Sin #4 – Not Marketing to Your Client Database
Many mortgage professionals believe that once you “close the deal” and the happy client walks out the door, then the deed is done and you need to move quickly on to the next prospect. While that’s true, your next prospect might have just walked out the door!

Many mortgage professionals tend to think, “My client just financed their home through me – - they’re not going to buy another home any time soon so why waste my time on them. Let’s find a new prospect.” The fact is that you should be getting 60% to 70% of your business from your current clients through referrals and repeat business.

In your marketing plan you should be including customer appreciation events, monthly or quarterly newsletters, and greeting cards all designed to stimulate repeat business. In addition, every small business should implement systems that generate “multiple streams of customer referrals.” If you need more ideas for referral systems you might want to visit www.AutopilotReferralSystems.com.

Sin #5 – Not Testing and Tracking Your Marketing Efforts

John Wanamaker’s famous 1886 quote sums it up very well:

“I know that 50% of my advertising is wasted…
…I just don’t know which half!”

There’s nothing worse than spending money on a marketing campaign and not knowing whether it worked. It’s even worse when you continue to spend money on a marketing campaign that you think is working, but really isn’t.

The only way to invest in your marketing efforts with confidence is to test a campaign, track it, and measure your results. That’s why I recommend always offering something of low risk, like a special report, seminar, or audio CD to get people to respond immediately via the phone or your website so that you can track your response.

This strategy also allows you to capture your prospects contact information so that you can continue to follow up with them.

Sin #6 – Not Following Up with Your Prospects

Studies have shown that 81% of all sales happen on or after the fifth contact. If you’re a mortgage professional and you’re only doing one or two follow-ups imagine all the business you’re losing.

Not following up with your prospects and customers is the same as filling up your bathtub without first putting the stopper in the drain!

Here are 4 keys to developing a successful follow-up system:

1. Create a lead capture system that is accurate and reliable.
2. Develop compelling follow-up marketing literature that will drive traffic to your website or phone calls.
3. Systematize the process so that the process happens day in and day out, the same way every time.
4. Automate the system as much as possible using a contact management system and/or an outside mailing house to do your mailings.

Sin #7 – “Spraying and Praying”

Believe it or not, not everyone is a good prospect for your mortgage services. If that’s the case, why would you spend your precious marketing dollars trying to reach them? It doesn’t make sense. If everyone is your prospect then no one is your customer.

Unfortunately, too many mortgage professionals send general marketing message using media like radio, bus stop ads, non-targeted unaddressed mail drops, and general newspaper ads to “spray” their message to everybody and “pray” that enough people see or hear it to make it worth the investment.

Instead of spraying and praying, narrow your focus onto a specific niche market that actually has a need for mortgage financing and then market to people just like them. If your ideal prospect is an apartment renter paying 900+ per month, then find the apartment complexes where those people live and market only to them. Your response rate will go up and your cost per sale will go down when you begin to target your market.

Sin #8 – Not Differentiating Yourself

Did you know that your prospect receives, on the average, over 3, 000 marketing impressions a day! With all that clutter that you have to compete with, how do you make your mortgage business stand out?

How do you differentiate your business in a way that separates you from the competition? Is it with ads that say, “best rates”, “best service “, or “unbiased advise?” Everyone else is saying the same thing! You need to differentiate your business in a way that stands out from the crowd and gets noticed.

A simple way to do that is to keep a close eye on the marketing that really captures your attention and make a note of it. Then borrow and modify those strategies and ideas to create your own unique and compelling message.

Conclusion

It’s true the majority of mortgage professionals are committing one or more of these marketing sins, but you can repent and improve. My challenge to you is to take just one or two sins that you’re committing and focus on improving them. When you’ve got them nailed move on to another sin and overcome it. Business success usually results from commitment to making small incremental improvements over time.

Follow the Advertising Dollars and Improve Your Mortgage Business

If you could take advantage of the marketing insight of Coca-Cola and Pepsi, would you follow their example? You can…and all you need to do is follow in their foot steps.

Every day hundreds of people walk in and out of your corner convenience stores. Coca-Cola, Pepsi and a host of other large manufacturers know that, and spend millions of dollars on promotion and signage at these small stores. They know they will benefit from the advertising and gladly pay the signage costs.

If you haven’t visited your local convenience stores lately, maybe it’s time for you to make a few stops. Most of the stores in my area have recently been refurbished, renovated and re-designed to support an increasing amount of customers. All of the stores are in great traffic locations and are both clean and attractive.

Convenience stores offer a great opportunity for you to originate mortgages. People from all walks of life shop in these stores and many of them are good prospects for a mortgage.

Just ask the proprietor if you can leave your fliers or business cards somewhere in the store. Remind him that you always know where your referrals come from and then take care of him when you close a mortgage. Code all of your marketing material so you can keep track of your referral sources.

Take it one step further and offer to sponsor a “notice or bulletin board” for the store. Your job will be to maintain the board by keeping it neat, clean, current, as well as up-to-date with your mortgage information.

Controlling and then maintaining “bulletin boards” is an awesome way to originate mortgages. It’s also extremely low-budget which makes this method extremely attraction for mortgage professionals. You are in total control enabling you to purge unwanted notices from other mortgage folks, and realtor/agents other than those with which you have a current working relationship.

Set some guidelines for the “bulletin board” and then post them on the board itself. You can accept dated notices of garage sales, estate sales, yard sales, car sales, FSBO house sales, community/neighborhood schedules and happenings, and business cards to name a few. Don’t forget to add your mortgage stuff to include business cards and fliers. Place a small discrete banner at the top that says “Compliments of XYZ (the store’s name) and Joe Smith at ABC Mortgage, Inc.”

You may think that this kind of promotion is small and insignificant…but, following Coca-Cola and Pepsi and other large manufacturers can’t hurt your mortgage business at all. In fact, you’ll find that it can help significantly.

About the Author: Tom Domin has over twenty-five years of experience in sales and training in Real Estate and as a Licensed Mortgage Broker. He is currently publisher of “Tom’s Mortgage Tips” a twice monthly Mortgage Newsletter for Mortgage Professionals. You can sign-up by visiting www.MortgageMarketingToolKit.com/

5 Highly Effective Ways to Use Your Mortgage Business Card…Part II

In Part I we talked about adding value to your card and using the back of the card to promote your mortgage marketing message. I’m sure these remaining business card tips will help you in your mortgage business:

3. Set a goal indicating the number of business cards you want to hand out each day.

If you’re a newbie (new person) in the mortgage business with a limited budget…or if you’re an experienced originator experiencing a period of very few referrals…this tip is for you. Even the best of us get back in the trenches to generate business.

Tom Domin is currently publisher of “Tom’s Mortgage Tips” a twice-weekly Mortgage Newsletter for Mortgage Professionals and the author of “101 Ways To Originate Mortgages” at: http://www.101WaysToOriginateMortgages.com/

Now here’s the deal: You pick the number and set your daily goal. The only thing I suggest is that you pick a good number…it can be three, five, seven, ten, etc.

You’ll have to meet your goal every day. Now, I don’t expect you to work on Sunday and…you can also take off Saturday…but only if you’ve reached your goal the previous five days in a row.

So…if you picked five as your daily goal and you reached your goal each day…you now have twenty five cards out there working for you. Do this for a month or two or three and all of a sudden you have three hundred cards out there working for you.

Are you going to get some business as a result…of course you are. It’s a numbers game…the more people you talk to…the greater your chance of success.

When I first started in this business, this is how I did it. I picked ten as my number and at the start of my day I set aside ten business cards. I made a promise to myself that I wouldn’t go home until I had handed out every one of those cards.

I did that for over six weeks straight and even worked in a couple of Saturdays. No matter what I had going that day, I made sure that I hit my goal. I have to tell you…it works. In six short weeks I had distributed over 330 cards. It wasn’t long before I had some calls coming in from these contacts and eventually loans in my pipeline.

4. Print your own cards. Even if your company supplies business cards, find a way to print a few cards.

Most employers don’t object to this. Plus, this gives you the opportunity to create an identity with your card as well as produce cards with multiple backs.

Why multiple backs you may be asking? For different sales messages of course! For example…If you spend a fair amount of time calling on Realtors, then the back of your card should relay a message geared specifically towards Realtors.

Over the years I’ve seen cards with various back designs including the following:

1. A mini-certificate good for $250 which can be applied towards closing costs.

2. A list of documents needed to begin the application process.

3. An Amortization Schedule.

4. A list of loan programs available to borrowers.

5. A special loan program like the low start rate program.

6. A statement like “I save commissions!” or “Last year we saved $146,000 in commissions.” This is obviously geared for Realtors.

7. “We offer easy Builder approval!”

8. The possibilities are absolutely endless…think about your market…and you’ll find a message.

Ok, here’s my last point on the subject of Business Cards:

5. We touched on it above…use your business card to create an identity for yourself. Printing your own card helps to do this. Personally, I don’t like the picture idea at all…I’ll leave that idea for the Realtors.

Instead, create a consumer-friendly phrase to separate yourself from other loan officers. Many loan officers use “Loan Officer for life” theme. Think original, such as; “Moving? Take me with you to finance your next home.” Spend some time on this and pick a good brand for yourself.