Loan Officers: The $41,600 Reason Why Your Closing Ratio Matters
Written by: Joe Pahl
If you could improve on one aspect of your business, what would
Most loan officers would want to make their marketing efforts
have better responses. And while marketing is critical to
business success, there are other aspects of your business that
are overlooked and could have much more immediate results.
This article is going to show you how improving your closing
ratio just a little bit can have massive effects on your
earnings for the year.
We are going to talk in hypotheticals for a second, so bear with
We have two loan officers working in the same office. There
businesses are identical in every way. They have the same
processors, underwriters, and marketing tools.
The only thing that is different is that Loan Officer A has a
slightly better closing percentage than Loan Officer B, and
let's see how this will affect their commissions in the long run.
Both loan officers, through their marketing and prospecting
efforts, meet face to face with 25 potential customers each
week. They both also average about $800 per closing.
Now Loan Officer A is a better closer than Loan Officer B, but
only slightly better.
So out of those prospects, Loan Officer A closes 3 of them, and
Loan Officer B closes just 2. That one loan difference means
that Loan Officer A is 4% better at closing than Loan Officer B.
Did you see what I just told you? Loan Officer A didn't close
twice as much, or even 25% better. It was just 4%.
Now 4% doesn't seem like much, right? However, that 4% allowed
Loan Officer A to close one more loan that Loan Officer B, and
at an average transaction commission of $800, that 4% will cause
a difference in gross income of....get this:
Over $40,000! ($41,600 to be exact).
Becoming a better closer is like any other skill that can be
studied and mastered through education and practice. Pick any
book by Brian Tracy or Todd Duncan, and you are well on your
way. Also, take the time to practice scripts and/or roleplay.
It's not just knowing what to say, it's also knowing how to say
it and it will only sound natural through repetition.
So the next time you are brainstorming ways to improve your
business, remember how changing your closing ratio (by just a
little bit) can generate incredible financial rewards. Just a 4%
change caused a difference in over forty grand in income.
About the author:
Joe Pahl is a marketing consultant and co-creator of the Loan
Maker Gold System for Loan Officers ( www.LoanMakerGold.com). To
receive his free eCourse "7 Strategies Loan Officers Can Take to
Guarantee an Awesome 2006" please sent blank email to
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