74: 38% of Originators Won’t Renew

Welcome to the 10 Loans a Month podcast, where mortgage brokers become business owners. And now, your host, Scott Peckford. Hey Broker Nation, welcome to the I Love Mortgage Brokering Podcast. Today I'm doing my 10 Loads a Month series. This is a tactical podcast we produce every week and I'm your host Scott Beckford.

Today's topic, 38% of originators will not be renewing at the end of 2022. I feel like we should play that music. They're calling it the end. I actually don't think it's the end. It will be for some people, of course.

So a couple of things that come to mind when I think of this first is that anyone with massive overhead, so people running brokerages or businesses that have massive overhead, you probably got to be a little bit worried about this because volumes are going to go down. And if you've got. big expenses, it could be stressful. As Warren Buffett says, only when the tide goes out do you discover who's been swimming naked and the tide's going out.

The second thing is that there's going to be experienced agents who are going to be like, you know what? It's been a great run. This is a cycle, by the way. We've seen this happen before. It's going to happen again. We're going to go down, and then we're going to go back up again. There's going to be some people that are at the tail end of their career. that are kind of like, you know what? It's been a good run. I think I'm going to pack it in. I want to go sip mojitos on the beach in Mexico.

And I don't really want to chase clients anymore. And so I think that one of the opportunities right now is to acquire books of business from experienced agents. In fact, something that we're looking at doing. And so if you're an experienced agent, you're listening to this and you're like, man, I want to sip mojitos and I want to still get paid to sip mojitos.

in Mexico reach out to me. We are actively looking for books of business because I think that this is a massive opportunity. So that's the first thing I see is that the experienced agents that are like, hey, I've made a bunch of my money.

I don't want to work so hard. It's going to be harder work in the next, you know, 18 to 24 months. And so good for you. If you're at that stage in your career, you know, make sure that you make a smart exit. One of my podcast episodes is how to sell your book of business.

So you can go back and have a listen to my thoughts on that on the 10 Loans a Month show. So check that out. But here's the thing. So some experienced agents are definitely going to be exiting stage left. Some newer agents, it's going to be a struggle. There's less business out there. And so the second thing you need to...

be aware of is you're going to have to become very good at prospecting. Prospecting is going to be key. I was talking to one of my coaches at 10 Ones a Month Academy the other day, and he was talking to a broker who did 90 million last year. This 90 million producer, he admitted, he's like, I'm a little nervous about prospecting. like they've gotten out of the habit of it.

So the experienced agents have been literally deals falling in their lap. They've been getting overwhelmed with business. Now they have to switch gears and go prospecting. Some of them are not going to make that shift. So if you're new and you're like, oh, it's no fair. No, no, no. If you're new, you know you have to.

prospect and hopefully you've been developing those skills and now is the time to go out and acquire market share because even if somebody's experienced if they're not willing to prospect their business is going to diminish and so prospecting is going to be super valuable you know in our brokerage we coach our agent

on how to use their network to go out and find real estate agents and use those real estate agents to build their business. And our agents are flat out busy. Like these are rookie agents that have followed our method. They're crazy busy. and even in the midst of what's happening in the market, but you're going to have to prospect. Don't expect.

business to just fall in your lap and be like oh I can barely keep up so there's going to be a shift happening and the prospectors are going to win the prospectors are going to be out there acquiring market share they're going to be growing their business And the people that don't want to prospect that want to sit back and wait for the phone to ring are probably going to see the volume go down significantly in the next year. So that's the second thing that I think about that.

The last thing I'd say when it comes to this is that I think brokers in general originators are going to be looking at their cost structure. So when they're at a brokerage and some owners charge a lot of money, but there's not a lot of value.

And so I think that you're going to see a migration happen of brokers to more efficient models because you're going to be like, when you're making tons of money, you don't really care. You're like, I'm overpaying here, but who cares? I talked to a broker once and she was at a large brokerage and she explained.

me what her volume was and her splits. And what she didn't know is that at the same brokerage, there's another broker who paid $80,000 less than she did because he negotiated better than her. To me, that's just wrong.

And people aren't going to get away with that anymore because what's going to happen is that if the volumes go down, you start to look at your overhead and you're like, okay, what am I paying for? Why am I paying for this? What am I getting for? And if it's valuable, if it's worth it. awesome. If it's not, I think that you're going to see more brokers going, I need to look at all my options out there right now. The other thing they have right now, which

is going to happen is they're going to have a bit more time. When you're overwhelmed with business and you're too busy, even if your current setup is expensive or more expensive than it needs to be, you don't bother because it's a hassle. Let's be honest, changing brokerages or changing companies is a hassle. You don't want to do it if you're barely keeping up, even if you know you're going to save money on it.

But as soon as you start to see your volume go down, you have some more time and you have to pay attention to your nickels and pennies. You're going to be more prone to want to make changes. And so I think there's going to be a huge migration happening of brokers from costly.

high cost, low value brokerages to lower cost structures that are more efficient that provide value. That's my thoughts on it. If 38% of originators are not renewing in the US, man, giddy up. There's so much opportunity out there if you see it correctly.

First is look at, you know, if there's opportunities, buy a book of business. I think that that's going to be something that is going to happen more and more. I actually sold a book of business several years ago. And so I've got quite a bit of experience in it. From my initial deal to the deal I ended up doing, it was literally five times more.

valuable hey you can hear my dogs it's working from home now you're going to get some of that so basically yeah i was able to put together a deal that was five times more valuable for me and for the other broker, but you got to know what you're doing. So buying books of business, I think that prospecting is going to be absolutely critical if you want to still gain market share. And then finally, cost structures.

If you're a broker owner and you charge a lot, but don't provide a lot, you probably have to worry about your agents packing up and being like looking around because they're going to have the time to do it. And they're going to be looking at the nickels.

dimes and making sure that they're getting a good value. Hopefully, we'll see what happens in this next year. It's going to be very exciting either way. If you're listening to this, a couple of quick things. First, if you're an experienced mortgage agent, go to 10moansamonth.com. We have an academy with just some amazing coaches you can get.

on the wait list. We open it up a couple of times a year. If you're a new agent and you're like, how do I grow in this market? Go check out rookie to rockstar.ca. We have a webinar there that we walk you through. We show you exactly how we help rookies. recruit real estate agents, how they can become master prospectors. And go check that out. And thanks again for listening to this episode. This is an I Love Mortgage Brokering production.