Ever-evolving mortgage rules and lender guidelines can be a lot to take in, even for the most experienced brokers in our industry.
Now imagine that you’re just beginning your career as a mortgage broker. Not only do you have to wrap your head around these changes, but you have a host of other challenges: finding business, learning lender and insurer guidelines, competing against online discounters, creating an Internet presence, building lender status, and so on and so on.
For young brokers, it’s important to know how other new agents are handling these challenges. So we decided to reach out to Kamloops, B.C., broker Ryan Smith. Smith has been with The Mortgage Centre team in Kamloops for just seven months and has about 30 active clients. Here’s his view of life as a rookie broker…
CMT: You made a big career change to become a mortgage broker. How come, and what were you doing before?
Ryan: I was in retail sales for about 10 years. About five years ago I decided that I couldn’t see myself doing that when I was 40 or 50 years old and started looking at real estate as an option. I looked into real estate investing, getting my Realtor’s licence, and a few other things. When it came down to it, I just liked the idea of being the support crew. I liked the idea of being the guy that comes up with solutions for people…In terms of choosing to become a mortgage broker over anything else, the main reason is, I get to be an important part of the biggest financial decision people usually make .
CMT: What have been your biggest challenges in the business so far?
Ryan: I think my biggest challenge has probably been marketing. I think in B.C. our training program and the standards we hold our brokers to are fairly high. I found that once I got into this, I had the tools I needed in order to process the deals, underwrite and create files. But we weren’t necessarily trained on other aspects of the business, like how to find clients and how to retain them for the long term.
CMT: You target a specific demographic. How has that worked so far?
Ryan: I think it’s working really well. Focusing on a niche market has allowed me to become really good at what I’m doing. I think too many brokers spread themselves thin by trying to [juggle] too many things. For me, to think I can be an expert in reverse mortgages, construction mortgages and purchase-plus improvements all at the same time would be foolish. It’s not to say I don’t understand the concepts, but I think it’s important to excel in a particular area and make sure I…have a good grasp of the programs and policies before expanding or moving on to something else.
CMT: What percentage of your current clients would fall into the ‘Millennial’ age group, that is, in the 18- to 34-year-old range?
Ryan: I would say an honest 75% at the moment. I’ve wound up dealing with people who are out of my niche, out of necessity [to] help the clientele that comes through the office. But of the clients that come [from] my own resources, I would say 90% are my age group, that Millennial group.
CMT: As a new broker, how do you find keeping up with lender or insurer guidelines?
Ryan: One thing that has been a big learning curve, and that I’ve had to work really hard at, is understanding all of the unique policies between all of these different lenders. And not only going through their guidelines and understanding what their policies are, but reaching out and making connections with the BDMs and underwriters. I think most brokers would agree that in order to get deals done effectively and get [more difficult deals] through, you need exceptions, and you need to have a really good relationship with your BDMs and your underwriters. But as a new broker, you don’t always have the opportunity to be putting through deals every single day of the week, all week long. It’s taken a bit of time to go out and make [that] contact.
In terms of the basic guidelines, you know, B-21 and those sorts of things, that’s the way I’ve always known it. So, it wasn’t a big adaptation for me to [realize] that this is the way things are going to be going forward. Unlike more experienced brokers, I haven’t known it any differently, so I don’t struggle with it…
CMT: Does technology play a role in expanding your network?
Ryan: Absolutely. Technology is a big part of my business and a huge part of the way brokers work. In terms of communicating between myself and lenders and clients, I’ve been using things like DocuSign, for example. It’s very rare that clients come and sit down in my office anymore. By comparison, some brokers are not really comfortable with that. I think maybe they [don’t understand] that this technology is secure, and legally binding, and makes life easier for everyone involved.
For me personally, what’s really working is taking the old-school mentality that most established brokers have of building a network [and referral business] that’s going to support you in the long run. I’ve found that I’m able to make that work, but I’m doing it in a different way. For me it’s a lot of social media…I think that’s been one of my biggest lead generators. It’s things like my Facebook group, Pinterest, Twitter, you know, all these sorts of things where my generation is flocking to…where we’re spending our time. It’s a really inexpensive way to stay in front of people. Even in the day-to-day business, communicating with my clients, whether its Millennials I work with or the older generations, I’ve found that the majority of people now are as comfortable—or more comfortable—communicating over text or email as they are picking up the phone and making a phone call. That was a real eyeopener for me actually.
CMT: You run your own website, ryanwsmith.ca, which includes a mortgage blog (www.kamloopsmortgageadvisor.ca). Why did you start the blog and what has your feedback been like?
Ryan: It’s actually been getting a really good response. My intentions from the beginning were to educate people and put information out there in a way that’s easy to understand—not just for clients, but for Realtors and other professionals as well. I try to go through topics that clients have questions about, in a way that lets them take their time and read through it on their own schedule.
CMT: Has your online presence paid off?
Ryan: Definitely. It’s one of those things where, when you’re able to position yourself as an expert, in any given business, people will automatically build a level of trust. I want people to inherently understand that I know what I’m doing. That can be difficult to accomplish as a young person getting into a new business…
CMT: How have you been able to compete with online discounters and well-established traditional brokerages?
Ryan: The two fall into two very unique categories and you have to approach them differently. I knew going in that this was going to be a competitive business. In terms of the online discount brokerages, I feel like the position I’m placing myself in is not a direct competitor to them. With my clients, I try to clearly separate what I do from what they do. I’ve never been a rate shopper in my own life, and I don’t feel like many of my clients, if any up to this point, have really been rate sensitive per se. It’s more important for them to feel that they’ve gotten the right information, that they can trust the information I’ve given them and that they’ve received different options…
In terms of the more established brokers, that’s a more difficult nut to crack. To a certain extent it’s understanding what’s made them successful and trying to turn that into something I can not only replicate, but improve upon. Before I ever got started in this business, I interviewed quite a few different brokers in my local area and said, “Hey, what does the workday look like for you? What is making you successful?” I took notes and tried to get an understanding of what was working for them. That actually benefited me…
CMT: If you could change two things about the mortgage broker industry and how it deals with new brokers, what would it be?
Ryan: I would encourage a lot more hands-on training for new brokers. I made the fortunate decision to attend an MBABC course very early on. Some brokers in my office warned me that there might not be much to learn, but I showed up and the course was fantastic. It was exactly what the licensing course was missing. It talked about how to use D+H Expert, it talked about underwriting guidelines, income qualification. These are all things that they touch on in the licensing course, but they never show you how to use them to process a deal, talk to clients, understand which lenders they fit with, etc.
For new brokers coming into this, I would definitely highly recommend getting involved with some of the organizations, whether it’s CAAMP, MBABC, RECA or whoever. Take some of their courses because what they’re teaching is a completely different type of learning than what the licensing courses are teaching.
CMT: How did your expectations of becoming a mortgage broker compare with how it actually unfolded?
Ryan: When I first entertained this as a career, every person that I spoke to in the industry said, “Be prepared to go your first year without doing any deals at all.” It took a while for me to swallow that. But once I prepared myself for this worst-case scenario, and realized that I’m still going to be able to do this next year even if that worst case occurs, then everything else fell into place.