Bill Hart sits down with Steve Harney of the KCM Blog for a one on one 
Bill Hart: As we look at the relationship between Realtors® and mortgage lenders over the last twenty years, describe how the relationships have changed. Steve Harney: Twenty years ago, the agent sold houses and saw the mortgage professional as a necessary evil to get the transaction completed. I think that was very shortsighted. I’m not going to blame the Realtor® alone. I think that both sides were worried about their half of the equation and sometimes the communication between the two sides wasn’t as good as it should have been. However, today, the real top real estate professionals and the top mortgage professionals are starting to realize that working together right from the beginning—as soon as that buyer walks in the door, maybe even before that buyer walks in the door—has really helped them and the consumer. I think it is consumer driven right now. The consumer wants to know that they have a team working with them to help them reach their dreams. The great Realtors® and mortgage professionals realize that working as a team makes the whole process much easier for the consumer. BH: I agree, Steve. I think that’s a great way to frame it. And from my perspective as a guy who’s interviewed over 200 top agents and coached a number of Realtors® and mortgage lenders, there is less overall volume which demands an efficiency of scale and synergies that I see working out there. I wrote a blog on this recently: “Forks and Spatulas.” There was a time where everybody in the business sort of had their fork in this really big pie. And now that pie is smaller. And the best people, both on the real estate and the mortgage side, are starting to pull their spatulas out, not just forks. And so you touched on all of it. I’m just seeing it from a slightly different perspective, kind of that “boots on the ground” perspective. SH: I agree with you a thousand percent. Out of every challenge comes opportunity. I think the challenge—a shrinking market over the last several years—created the efficiencies that you are talking about. It created relationships where people started to depend on one another. As the market starts to go the other way and that pie starts getting bigger, we can’t forget those efficiencies and how important they are. We must take these efficiencies, along with the other things we learned over the last couple of years, and project them forward into a much stronger market. BH: I agree with you and think we’ve seen that in other industries. I’m thinking of the airline industries and automobile dealerships. There were a lot of businesses that were, as they say in Texas, "fat, dumb and happy" for a number of years. When a market contracts, there’s a need for efficiencies. There is a natural rising to the top by the cream—the best of the best. People start to see new ways to do things. As you said, each side probably viewed the other as a necessary evil twenty years ago. Now, there is a true and genuine synergy, Steve, of which you’re certainly at the leading edge as you travel across the country talking about Bridge Builders. I refer to it as “better together." It's the same message: find someone with whom you have a similar world view, a similar way of approaching your business, and create synergies. I’ll give you a simple example. In the lending industry, for years we have referred to a discipline as an annual mortgage review. So a good mortgage lender would tell their borrower: "I’m going to reach out to you each year. We're going to take a look at your rate and see if it is time to refinance.” I recently interviewed a woman named Lisa Munoz in Austin, Texas, a Realtor® who sells 75 homes a year. She has taken this concept and applied it to real estate. She tells all of her clients: "We’re going to do an annual review. I'm going to come by with a clipboard and look around the property, see what improvements you’ve done, try to give you an idea of some changes I would make, talk about the possibility of refinancing. If that makes sense, I’ll refer you to my mortgage partner.” And she brings in a sense of long-term continuity with her client base, Steve, by talking about an annual review instead of talking to them in five to seven years. SH: You're right on there, Bill. I listened to your interview with Ms. Munoz and it was sensational. I agree with the point you’re making. On the real estate side, we’re very much a PEOPLE business. On the mortgage side, there has always been more concentration on the BUSINESS aspects of the industry. Many real estate professionals have learned much from the mortgage professionals. They are incorporating these business concepts with the people side of it to really drive their businesses. BH: Absolutely. SH: They are the people who are going to see the most success going forward. BH: I agree. Historically, there has been more of a business approach on the mortgage side than on the real estate side. There are a few reasons for that. There are people in the mortgage industry that came from financial backgrounds and maybe had more advanced degrees. In real estate, historically, the entrance criterion has not been as difficult. It had been very easy to just dabble in real estate. But, not today. That’s not who’s in the real estate industry today. And I think most of us, including the consumer, would say, “Thank goodness.” Today, although their numbers are fewer, agents' professionalism is higher. SH: Right again, Bill. You mentioned Bridge Builders before. What we’re seeing is that, in marketplaces where top mortgage professionals are working side by side with top real estate professionals to deliver five-star service to that buyer, both sides are seeing their businesses really skyrocket. Most importantly, it’s helped the consumer, and the consumer is going to make the final determination of who they’re going to use to find a home and get a mortgage based on the services offered. BH: Absolutely. On the mortgage side, Steve, I see mortgage lenders using real estate information such as Keeping Current Matters (KCM), the monthly subscription, as well as the KCM blog, to remove some of the confusion in the industry. They use the data that you compile on a monthly basis to help the person who knows they should buy but are just nervous. SH: There are definitely people sitting on the fence right now. BH: There you go, fence-sitters. SH: We shouldn’t be selling houses to people who shouldn’t buy. But, we should assist the people who are ready, willing and able to buy. We have to help those people realize the opportunity that exists right now. We have to let them know that people are still getting approved for a mortgage at the rate of 8,300 a day! BH: Unbelievable. SH: I think there are many people sitting on the fence, worried about whether or not they can get a mortgage. We have to get them in front of mortgage professionals and let them know that while the lending criteria have definitely tightened, they haven’t disappeared. And, if they have a challenge with qualifying for a mortgage today, they can work on getting themselves ready in six, nine or twelve months from now. BH: Exactly. It is going to take time for some borrowers to get their finances together. Maybe they need to get more cash pulled together, or they need to improve their credit. Some of the mortgage professionals that I coach have forty, fifty, sixty different people that they’re sort of incubating for the Realtors®. So if we can get completely real with this conversation, one of the dialogues that have happened historically in the real estate industry has been: mortgage lender approaches the Realtor® and says, “I’d like to do business with you.” Realtor® responds—it’s almost like they were taught this in pre-license school— “Great. If you’ve got leads for me, I’d love to talk to you about working together.” Well, here’s the problem with that: it’s completely transactional, and to be completely honest with you, the mortgage lender typically is not in the lead-generation business. I’ll tell you what business they are in—they are in the lead-incubation business. So my message to real estate agents who have not yet flipped this switch in their head is to look for the person you connect with, that you have a natural affinity and dialogue with. “I met some people at an open house this weekend, they need a little work. Here’s what I’d like to do. I’d like to turn them over to you. You have your conversation with them and keep me in the loop. I recognize this transaction may not come to fruition for six, nine or twelve months, but let’s work together.” I believe that’s the way that mortgage professionals and Realtors® in this market and beyond can begin to work together even more efficiently. They become a team working with a buyer to help the buyer reach their family’s goals. We'll be able to move them closer to those goals every day until they are not just ready and willing, but also able. SH: You hit the nail right on the head, Bill. Right now, the market’s picking up in many regions across the country. We’re starting to see more and more people at the open houses. We keep hearing more and more about multiple offers. I know the agent is going to take care of the buyer who gets the home. They’re going to make sure that deal gets to the closing table. They’re also probably going to take care of the buyer who lost the bid, because they know that they’re ready to buy. However, because they’re spending a lot of time on those two people, I’m nervous about the other ten people who came to the open house. BH: It’s a great point. SH: Who’s working with them? BH: You're absolutely right. SH: Let’s at least get those ten people qualified and working with a mortgage person to find out what they need to do to move forward. And if a real estate professional gets a call from a mortgage person saying: "Remember that young couple that you met at the open house? Well, we just found out that they have a hundred thousand dollars in cash and both of them have really good jobs. They're going to buy something in sixty to ninety days. You have to get back in touch with them.” I think these are the things that can really help drive the market. BH: I completely agree. You know, we refer to that as the “law of the harvest.” Picture yourself in a field walking up to an apple tree. You have a basket and you’re picking the low-hanging fruit. You can fill your basket for a time. But, after a while, all that fruit is gone. The law of the harvest states: you can’t just be pulling fruit off the mature trees. We need to be planting seeds; we need to be turning over the soil, watering them, feeding them, and watching over time. And I believe that’s what we’re doing. We’re creating a harvest mentality. Steve, I want to ask you about what you’re doing out in the field right now with Bridge Builders because I think it’s unique in terms of building that bridge, just as we’ve been talking about this entire dialogue between Realtors® and mortgage lenders. What would be the primary thrust or focus that you have right now with that group? SH: In the market we’re in right now, financing is changing rapidly and the real estate market is evolving very, very quickly. No one person can keep up with both aspects. We need a team. We need someone who can stay abreast of all the little nuances and changes that are occurring almost on a daily basis in lending. We have to make sure that, on the real estate side, we have someone who really understands the market and how it is moving forward. What we try to do with Bridge Builders is find those two groups and put them together. We know the true professionals on both sides really care about the consumer experience. But they have to learn how to communicate better with one another. So, we’ve built a program to help the great loan officers across the country understand the real estate side. We started with a small pilot program and have had amazing results. We're about to open the program to other mortgage lenders across the country. Bill, you’ve been a great coach for many, many years, helping mortgage professionals build their business. We are excited about joining forces with you to make the new program something truly special. BH: Thanks, Steve. I am also excited about the potential. As we wrap up, I want to close with some sense of action planning. I would encourage anyone who’s reading this to look at this dialogue—to pin it up on the wall and look at it—and say "Okay, I get it. This is the trend; this is the direction that our two industries are going in together. Thank goodness, we're flying in formation now." Steve Harney is a residential real estate expert with over 25 years of experience who specializes in sales and leadership training. He authors a monthly informational audio/visual presentation for top professionals titled, "Keeping Current Matters,” and travels the country as a sought-after public speaker and trainer. Bill Hart has enjoyed a dynamic 25-year sales and consulting career highlighted by the development of long-term relationships and high-profile visibility in the real estate and mortgage industries, primarily in the areas of sales and marketing, public presentations and strategic partnering. Bill has taken this knowledge and has focused it on the mortgage and real estate professionals he coaches. If you are a mortgage professional and would like to learn more about the Bridge Builders program please contact: [email protected]
Bill Hart: As we look at the relationship between Realtors® and mortgage lenders over the last twenty years, describe how the relationships have changed. Steve Harney: Twenty years ago, the agent sold houses and saw the mortgage professional as a necessary evil to get the transaction completed. I think that was very shortsighted. I’m not going to blame the Realtor® alone. I think that both sides were worried about their half of the equation and sometimes the communication between the two sides wasn’t as good as it should have been. However, today, the real top real estate professionals and the top mortgage professionals are starting to realize that working together right from the beginning—as soon as that buyer walks in the door, maybe even before that buyer walks in the door—has really helped them and the consumer. I think it is consumer driven right now. The consumer wants to know that they have a team working with them to help them reach their dreams. The great Realtors® and mortgage professionals realize that working as a team makes the whole process much easier for the consumer. BH: I agree, Steve. I think that’s a great way to frame it. And from my perspective as a guy who’s interviewed over 200 top agents and coached a number of Realtors® and mortgage lenders, there is less overall volume which demands an efficiency of scale and synergies that I see working out there. I wrote a blog on this recently: “Forks and Spatulas.” There was a time where everybody in the business sort of had their fork in this really big pie. And now that pie is smaller. And the best people, both on the real estate and the mortgage side, are starting to pull their spatulas out, not just forks. And so you touched on all of it. I’m just seeing it from a slightly different perspective, kind of that “boots on the ground” perspective. SH: I agree with you a thousand percent. Out of every challenge comes opportunity. I think the challenge—a shrinking market over the last several years—created the efficiencies that you are talking about. It created relationships where people started to depend on one another. As the market starts to go the other way and that pie starts getting bigger, we can’t forget those efficiencies and how important they are. We must take these efficiencies, along with the other things we learned over the last couple of years, and project them forward into a much stronger market. BH: I agree with you and think we’ve seen that in other industries. I’m thinking of the airline industries and automobile dealerships. There were a lot of businesses that were, as they say in Texas, "fat, dumb and happy" for a number of years. When a market contracts, there’s a need for efficiencies. There is a natural rising to the top by the cream—the best of the best. People start to see new ways to do things. As you said, each side probably viewed the other as a necessary evil twenty years ago. Now, there is a true and genuine synergy, Steve, of which you’re certainly at the leading edge as you travel across the country talking about Bridge Builders. I refer to it as “better together." It's the same message: find someone with whom you have a similar world view, a similar way of approaching your business, and create synergies. I’ll give you a simple example. In the lending industry, for years we have referred to a discipline as an annual mortgage review. So a good mortgage lender would tell their borrower: "I’m going to reach out to you each year. We're going to take a look at your rate and see if it is time to refinance.” I recently interviewed a woman named Lisa Munoz in Austin, Texas, a Realtor® who sells 75 homes a year. She has taken this concept and applied it to real estate. She tells all of her clients: "We’re going to do an annual review. I'm going to come by with a clipboard and look around the property, see what improvements you’ve done, try to give you an idea of some changes I would make, talk about the possibility of refinancing. If that makes sense, I’ll refer you to my mortgage partner.” And she brings in a sense of long-term continuity with her client base, Steve, by talking about an annual review instead of talking to them in five to seven years. SH: You're right on there, Bill. I listened to your interview with Ms. Munoz and it was sensational. I agree with the point you’re making. On the real estate side, we’re very much a PEOPLE business. On the mortgage side, there has always been more concentration on the BUSINESS aspects of the industry. Many real estate professionals have learned much from the mortgage professionals. They are incorporating these business concepts with the people side of it to really drive their businesses. BH: Absolutely. SH: They are the people who are going to see the most success going forward. BH: I agree. Historically, there has been more of a business approach on the mortgage side than on the real estate side. There are a few reasons for that. There are people in the mortgage industry that came from financial backgrounds and maybe had more advanced degrees. In real estate, historically, the entrance criterion has not been as difficult. It had been very easy to just dabble in real estate. But, not today. That’s not who’s in the real estate industry today. And I think most of us, including the consumer, would say, “Thank goodness.” Today, although their numbers are fewer, agents' professionalism is higher. SH: Right again, Bill. You mentioned Bridge Builders before. What we’re seeing is that, in marketplaces where top mortgage professionals are working side by side with top real estate professionals to deliver five-star service to that buyer, both sides are seeing their businesses really skyrocket. Most importantly, it’s helped the consumer, and the consumer is going to make the final determination of who they’re going to use to find a home and get a mortgage based on the services offered. BH: Absolutely. On the mortgage side, Steve, I see mortgage lenders using real estate information such as Keeping Current Matters (KCM), the monthly subscription, as well as the KCM blog, to remove some of the confusion in the industry. They use the data that you compile on a monthly basis to help the person who knows they should buy but are just nervous. SH: There are definitely people sitting on the fence right now. BH: There you go, fence-sitters. SH: We shouldn’t be selling houses to people who shouldn’t buy. But, we should assist the people who are ready, willing and able to buy. We have to help those people realize the opportunity that exists right now. We have to let them know that people are still getting approved for a mortgage at the rate of 8,300 a day! BH: Unbelievable. SH: I think there are many people sitting on the fence, worried about whether or not they can get a mortgage. We have to get them in front of mortgage professionals and let them know that while the lending criteria have definitely tightened, they haven’t disappeared. And, if they have a challenge with qualifying for a mortgage today, they can work on getting themselves ready in six, nine or twelve months from now. BH: Exactly. It is going to take time for some borrowers to get their finances together. Maybe they need to get more cash pulled together, or they need to improve their credit. Some of the mortgage professionals that I coach have forty, fifty, sixty different people that they’re sort of incubating for the Realtors®. So if we can get completely real with this conversation, one of the dialogues that have happened historically in the real estate industry has been: mortgage lender approaches the Realtor® and says, “I’d like to do business with you.” Realtor® responds—it’s almost like they were taught this in pre-license school— “Great. If you’ve got leads for me, I’d love to talk to you about working together.” Well, here’s the problem with that: it’s completely transactional, and to be completely honest with you, the mortgage lender typically is not in the lead-generation business. I’ll tell you what business they are in—they are in the lead-incubation business. So my message to real estate agents who have not yet flipped this switch in their head is to look for the person you connect with, that you have a natural affinity and dialogue with. “I met some people at an open house this weekend, they need a little work. Here’s what I’d like to do. I’d like to turn them over to you. You have your conversation with them and keep me in the loop. I recognize this transaction may not come to fruition for six, nine or twelve months, but let’s work together.” I believe that’s the way that mortgage professionals and Realtors® in this market and beyond can begin to work together even more efficiently. They become a team working with a buyer to help the buyer reach their family’s goals. We'll be able to move them closer to those goals every day until they are not just ready and willing, but also able. SH: You hit the nail right on the head, Bill. Right now, the market’s picking up in many regions across the country. We’re starting to see more and more people at the open houses. We keep hearing more and more about multiple offers. I know the agent is going to take care of the buyer who gets the home. They’re going to make sure that deal gets to the closing table. They’re also probably going to take care of the buyer who lost the bid, because they know that they’re ready to buy. However, because they’re spending a lot of time on those two people, I’m nervous about the other ten people who came to the open house. BH: It’s a great point. SH: Who’s working with them? BH: You're absolutely right. SH: Let’s at least get those ten people qualified and working with a mortgage person to find out what they need to do to move forward. And if a real estate professional gets a call from a mortgage person saying: "Remember that young couple that you met at the open house? Well, we just found out that they have a hundred thousand dollars in cash and both of them have really good jobs. They're going to buy something in sixty to ninety days. You have to get back in touch with them.” I think these are the things that can really help drive the market. BH: I completely agree. You know, we refer to that as the “law of the harvest.” Picture yourself in a field walking up to an apple tree. You have a basket and you’re picking the low-hanging fruit. You can fill your basket for a time. But, after a while, all that fruit is gone. The law of the harvest states: you can’t just be pulling fruit off the mature trees. We need to be planting seeds; we need to be turning over the soil, watering them, feeding them, and watching over time. And I believe that’s what we’re doing. We’re creating a harvest mentality. Steve, I want to ask you about what you’re doing out in the field right now with Bridge Builders because I think it’s unique in terms of building that bridge, just as we’ve been talking about this entire dialogue between Realtors® and mortgage lenders. What would be the primary thrust or focus that you have right now with that group? SH: In the market we’re in right now, financing is changing rapidly and the real estate market is evolving very, very quickly. No one person can keep up with both aspects. We need a team. We need someone who can stay abreast of all the little nuances and changes that are occurring almost on a daily basis in lending. We have to make sure that, on the real estate side, we have someone who really understands the market and how it is moving forward. What we try to do with Bridge Builders is find those two groups and put them together. We know the true professionals on both sides really care about the consumer experience. But they have to learn how to communicate better with one another. So, we’ve built a program to help the great loan officers across the country understand the real estate side. We started with a small pilot program and have had amazing results. We're about to open the program to other mortgage lenders across the country. Bill, you’ve been a great coach for many, many years, helping mortgage professionals build their business. We are excited about joining forces with you to make the new program something truly special. BH: Thanks, Steve. I am also excited about the potential. As we wrap up, I want to close with some sense of action planning. I would encourage anyone who’s reading this to look at this dialogue—to pin it up on the wall and look at it—and say "Okay, I get it. This is the trend; this is the direction that our two industries are going in together. Thank goodness, we're flying in formation now." Steve Harney is a residential real estate expert with over 25 years of experience who specializes in sales and leadership training. He authors a monthly informational audio/visual presentation for top professionals titled, "Keeping Current Matters,” and travels the country as a sought-after public speaker and trainer. Bill Hart has enjoyed a dynamic 25-year sales and consulting career highlighted by the development of long-term relationships and high-profile visibility in the real estate and mortgage industries, primarily in the areas of sales and marketing, public presentations and strategic partnering. Bill has taken this knowledge and has focused it on the mortgage and real estate professionals he coaches. If you are a mortgage professional and would like to learn more about the Bridge Builders program please contact: [email protected]
