Kevin Smith said, “Sometimes the path you’re on is not as important as the direction you’re heading.”
Are you a rowboat or a sailboat real estate professional?
In the real estate industry, like many other industries, knowledge is a highly valued commodity. The accepted thinking is that the more time you have in the business, the more knowledge you have amassed, and that cumulative knowledge can be used for the benefit of your clients. This rationale is certainly valid.
It is also true that over time, you have been a participant in more transactions, which gives you a wealth of experience in dealing with a variety of situations. This experience and situational awareness, developed over time, can be of tremendous value to clients.
Our industry is one in which knowledge, experience and awareness are essential characteristics that help define and differentiate us from other industry participants. These attributes are a key component needed to gain trust and offer best service the needs of our clients.
However, over the past several years the real estate industry, like most other industries, has been experiencing tremendous change. Not only is the marketplace changing, but the way in which we interact with the market is changing — dramatically. Depending upon the outlook of the individual, these changes can be viewed as being a debilitating situation or a transformative one. And the nature in which we deal with these changes will determine whether we and our businesses continue to grow and move forward or stagnate and diminish.
These changes are serving to transform not just real estate agents, but virtually everyone in the industry, including appraisers, attorneys, title companies, banks and even people like myself, mortgage bankers. Whether the real estate professional and their business continues to evolve will depend on the ability to adapt quickly to these changes and implement the processes that will allow their businesses to be transformed and run in a new fashion.
Change then, is the single most significant component influencing all of our businesses.
So having stated all this, I want to return to my original question at the beginning of this piece: rowboat or sailboat?
Rowboats are interesting vessels. In order to move forward in a rowboat, you must face in the opposite direction — backward. So your ability to move the boat forward depends upon your skill at keeping your balance and handling the oars evenly. Because your vision and attention are directed backward in a rowboat, navigation is difficult; you must fix your eyes on a distant landmark behind you in order to determine if you are staying on course.
It is also not easy to change direction in a rowboat, and because your attention is focused aft, you cannot see obstacles in the water that might impede your progress ahead. Finally, a rowboat handles best in only one direction: straight ahead. It is not advisable to be in a rowboat in heavy seas or a storm.
A rowboat real estate professional is someone who keeps looking backward to the old days and the way things were done then. Why embrace all this technology when the old way of doing business worked just fine? Rowboat professionals have difficult times adjusting to changing circumstances because they are looking in the wrong direction. They are only reactive in the way they do business. They yearn for the way things used to be, even when shown that the new ways might be better.
They resist change and are being left behind. Rowboat professionals fear change and are not interested in learning new techniques to help them work more efficiently or new marketing techniques that will enable them to raise their game to a different level.
Sailboats are also interesting vessels. In a sailboat the boat is facing in the direction it is heading, and the sailor can continuously scan the horizon to see if there are impediments or obstacles ahead in the water. This view makes navigation infinitely easier. A sailboat can change direction quickly — in fact, a skilled sailor can anticipate subtle changes in the direction of the wind and adjust his sails to best take advantage and change course.
Because the shape of the sails as they catch the wind is easily observable, the sailor can jibe or tack to change direction, but they are always doing so in order to move the boat forward in the most efficient manner. A skilled sailor can handle rough seas because he or she has learned what the capabilities of his vessel are, and he or she can rely upon the strengths of knowledge and that of the crew during a storm or uncertain time.
A sailboat real estate professional is someone who is constantly adapting to changes in the marketplace. They view change as essential, in fact, they anticipate how they can use changes in the marketplace to their advantage. They continually look for ways to improve their interactions with their clients using the latest technology alongside the old methods of communicating.
They strive to promote their businesses and themselves in a way that is the most impactful to them and will enhance their businesses. They are not reactive with respect to developments in the marketplace, but rather extremely proactive and strive to anticipate what they need to do in order to secure the best possible outcome for their client’s unique needs.
When faced with obstacles that arise during the course of a transaction, they have developed protocols that allow them to go in a different direction toward the goal of satisfying their clients.
In my industry, the difference between these two professionals is particularly easy to see:
A rowboat loan officer does not use technology well. They do not take complete, well-documented loan applications; they overpromise and underdeliver. They aren’t that interested in the customer because they never sit down face to face with them and offer to take them through the various stages of the transaction.
You never find them at the closing table because they don’t see the value in being there when the customer closes on the most important purchase of their lifetime or because they are out chasing another deal.
If you ask them for an update on the status of the loan application they can’t tell you; they don’t actually get involved in that — their assistant or a processor is often left to answer these questions. If you want to uncover a rowboat loan officer, ask them to explain all the closing costs in a transaction line by line to the customer. A rowboat loan officer does not like any of the changes brought about by the Consumer Financial Protection Bureau, which was created with the intention of protecting the consumer.
A sailboat loan officer, by contrast, is the consummate professional. They are quite capable using technology in their business, but they also understand the need to bridge the technology, which can be less personal, with a one-on-one relationship with their customers, in person, whenever possible.
Sailboat loan officers take detailed, thorough loan applications. They usually write a memo to underwriting for their files explaining the way the transaction was structured and any background information that would clarify foggy issues and make the underwriter’s job easier. They always reach out to their clients and referral partners with updates so the parties to the transaction are fully informed as the loan moves through the pipeline.
When difficulties arise, as they sometimes will, the sailboat loan officer uses their vast experience to help navigate a new course if needed, in order to arrive at the closing table.
The sailboat loan officer deliberately sets realistic deadlines and makes sure he or she can deliver on time — every time. A sailboat loan officer has fully informed their client about the transaction they are engaged in and given a thorough, detailed explanation of the closing costs. A sailboat loan officer will always take a phone call, answer an email, or be willing to sit down and meet with customers at their convenience.
They are always at the closing table, ready to assist if needed, and cognizant of the fact that this transaction is meant to be a joyous event in the life of their clients. They realize that the industry needs to change and adopt best practices such as the ones being proposed by the CFPB. They do not view “full, complete disclosure” as something new — it is the way they have always conducted their businesses.
So, as we enter the spring 2015 selling season, you will encounter and work with many people in the real estate industry. You can work with someone who is asking you to get on board with them in an outdated and wobbly craft, look backward with them and row toward an unseen destination. Or you can step aboard a sleek sailboat captained by a forward-thinking visionary, who knows the destination and the best course to get you there. The choice is yours. Whichever you choose, I wish you a smooth voyage.
Robert Ruth is a senior mortgage banker with over 28 years experience in the financial services industry. Connect with Robert on LinkedIn.