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2006 origination volume: $40 million
2006 average loan amount: $300,000
Software: Point for LOs, Mortgage Coach, Equity Optimizer
Referral Source Mix: 80% educational seminar attendees, 20% financial planners

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In Touch Today: How did you get started in the mortgage business?

Sean Briscombe: I trained for the Olympic dive team in 1996, while also working as a physical therapist. During the course of training, I was going to be gone for about six weeks straight. I went to my employer and said, "I'm going to be gone for six weeks. How does that impact my job?" And his response was, "Well, I can't guarantee that you're going to have a job, but good luck to you." I was flabbergasted. I didn't know what to do.

One of my patients at the time worked for Home Depot. They recruited me into their Olympic Job Opportunities program. It was a launching pad for me career-wise because it taught me how to run a business, how to create efficiencies, and how to take a $50 million a year business and make it work like a well-oiled machine.

I was next recruited by Dell Computers. It was right around 1996, when Dell was doing really well. They'd just started a new division called "Dell Home Systems" where they were selling direct to the consumer. I started with that division of about 90 employees. We grew it to over 1200 employees in just two years.

By 1999, I was really exhausted. I was pushing 80 hours a week at Dell. I decided to quit. I sold all my options, all my stock, and I kind of retired. I bought a house with cash. I bought a Mustang Cobra. I was living the high life.

Three months later I got a phone call from a friend of mine who had also worked at Dell. He'd just bought a couple domain names and he wanted to start a company. So we started a company called mall.com. It had one of the first universal shopping cart technologies and was a type of online shopping center. You could go online to Macy's, JCPenney, J Crew, any store you wanted to, through our site and put all your stuff into one basket and checkout at one time. Basically, we would escrow all the money and then disperse the funds to the different companies, minus our little fee, of course. The model worked really well and we were purchased by a venture capital group in 2001.

We then decided to start a second company. Unfortunately, it was the worst timing in the world. We had to shut our doors about a year later. After that, I did a little bit of consulting until a friend of mine, who was a Realtor at Keller Williams, called me up and asked me to help out a title company they did business with. I knew absolutely nothing about real estate. So I started working on the ground floor with the title company, marketing them to Realtors.

In the process, I started teaching the Realtors how to target CPAs and financial planners while adding value to their business through education. It was right about the time when Mortgage Market Guide and Mortgage Coach were starting to get some traction going in the industry. I ran into Kurt Warner, the CFO of Mortgage Market Guide. As a result, I decided I really needed to be on the mortgage side of things. So I left the title company and went into the mortgage business.

I knew absolutely nothing about mortgages, but I started with a group and learned as much as I could. I moved on to another company and continued to learn. I wanted to refine the mortgage business model and processes because I realized that most of the people in our business, at least in Austin, don't know how to manage a mortgage (liability) into an asset.

I don't know if you know who Edwards Demming was? He pretty much pioneered the rise of the Japanese auto manufacturers back in the ‘80s. He made a comment that always stuck with me. He said 94% of all business failure is due to a lack of process or a lack of following your process. If you look back over the year and say, "Okay, I lost all of these clients," you should be able to pinpoint exactly where it happened in your process. We really started focusing on that, and realized that you win most of your business at the very beginning of your process by differentiating yourself from the competition.

In Touch Today: Did you feel, at the time, that you were a success in the business?

Sean: I felt pretty good about our progress. But I was still looking at the gross revenue. I wasn't looking at how many lives I had changed, or how many families I had helped. I was still caught up in the rate and fee game.

We were doing a lot of no cost mortgages and refinances. We paid for all the closing costs out of yield spread. It was just a marketing tactic rather than a real strategy. I didn't focus much on using the mortgage as an asset, managing it, at that time. But real quickly I realized there was a huge need for that service. That's when everything collided. I met the guys at Mortgage Market Guide, started using their knowledge and expertise with the bond market to help manage a client's mortgage over time. I started using Mortgage Coach for their rate watch reports and total cost analysis in order to teach my clients how to reposition their assets to maximize the return on their equity.

In Touch Today: What mistakes do you think rookie loan officers typically make?

Sean: They tend to focus on rates and get caught up playing that game. We're fighting an uphill battle all the time because of marketing on television, the internet, the information from news media. They're always talking about rates, and everyone wants the lowest rate. Now we have companies like ditech.com and lendingtree.com where they're actually trying to commoditize our industry. They're treating a mortgage as a commodity, and the lowest price always wins in a commodity. A lot of rookie loan officers get caught up in that and start panicking, thinking they've got to do the same thing.

But they don't. They can literally change the game. They're in the perfect position because they don't have all the bad habits that more experienced loan officers may have, and they can start fresh and focus on unique concepts for the client.

In Touch Today: What mistakes do you think veteran loan officers typically make?

Sean: When a potential client asks for a good faith estimate to compare with other good faith estimates, they give it to them. They don't even think twice about it. They just shoot them a good bid and hope they win the business. That's the absolute worst thing they can do. They've basically established that they're no different than the competition.

Instead, they should say to the potential client, "Hey, you know what? Yes, rate's important and I'm going to fight to get you the best rate that I possibly can for your situation, but come on! Would you rather have a lower rate or a lower total cost? Do you even know what the difference is?"

I have clients right now who are buying homes for a million dollars, and they're adamant about putting 50% down in order to get a lower rate. I try to educate them, telling them that putting that money down is the worst idea in the world. I start by saying, "Look, Mr. Customer, my mission & purpose here is to be more useful to you, and if all that matters to you is rate, I'm not going to be useful. I'm sorry. We may not be a good fit, and that’s ok. Our process is very unique, and you’re going to have to invest some time, energy, money, and emotion. If you don’t want to do that, it’s ok, tell me NO now…you won’t hurt my feelings." And it shocks them, it wakes them up. They say, "Okay, tell me more."

It's a perspective shift that can happen in the blink of an eye, and it's really cool when it does. When you see your client go from, "I don't care about your sales pitch, just give me your lowest rate," to "That's interesting, tell me more," to "Okay. Now I want you to influence me," and then eventually, "I'm ready to go, I trust you, I believe you 100%, putting the largest purchase that I'm even going to make in your hands because I trust you as an advisor."

In Touch Today: If you had a son or daughter entering this business, what advice would you give them?

Sean: I would ask them why they wanted to be in the business. Is it just for the money? Or is it something else? You need to be clear on your mission & purpose. The more laser-focused you can be, the more you can do for your target market.

There's a ton of business out there. What was the number I read recently? I think it was 45% of all loan officers who were in business three months ago are now gone. So who is picking up the slack? Overall business has only dropped by about 10%. So someone should be taking on those clients. It's like having a ton of opportunity on the table. How much do you want to go after?

In Touch Today: What was your most successful marketing campaign?

Sean: We use educational articles in our newspaper advertisements so they look like an editorial or informational article rather than an ad. As part of the article, we mention our free education seminars. We get a huge response rate. What's even more interesting to me is that when the consumers get to the seminars, they are no longer interested in just finding a low rate. They are already open to looking at the bigger picture. The conversion rate from the seminars is more than 40%.

In Touch Today: What is your best turn-key sales or marketing idea?

Sean: The number one most effective marketing technique is still direct mail. We try to focus our direct mail towards specific groups.

First we have strivers. Strivers are kids right out of college. They're in their first job. They're just getting their feet wet. They don't have a game plan. We can be helpful to them but we really can't be that useful to them.

Then we have the thrivers. These are people who have a home in which they've built up a little bit of equity. They're starting to make money, but they're probably spending all of it and not saving for the future. We can be fairly useful to them.

Next there are the arrivers. These are people who are in their 40s and 50s and have 15 year mortgages or have their home paid down quite a bit. They have tons of equity in their home, and they're starting to save for retirement. This group is our key target audience. We focus on neighborhoods with 300 or more homes valued at $300,000 or more with 15 year mortgages, tons of equity, and in that age group.

Finally, we have the survivors. Survivors are the retirees. Now that they've gotten to retirement, they've paid off their home, or they have tons of equity in their home. They're starting to withdraw their retirement income, and they're realizing real quickly that Uncle Sam is taking a huge chunk of it. We can be very useful to them, just by showing them a couple of strategies with mortgages to reduce their tax consequence.

According to the experts, potential clients don't even notice your postcard until you've sent it to them four times. So we mail regularly and consistently. We are also trying to get more creative with the message, such as telling jokes in order to encourage the reader to turn it over and look at the back.

In Touch Today: Who or what has been the biggest contributor to your success?

Sean: For me it goes all the way back to diving. When I was training and competing, we had a very specific work ethic, drive, determination and desire to always be the best we could possibly be. Doug Andrew always says this phrase, "Good, better, best, don't let it rest till the good gets better and the better gets best."

In Touch Today: If you had a magic wand, what would you change about your business?

Sean: It can be so frustrating sometimes, working with people who don't get it. They don't understand the purpose and the importance of what we do. If I had a magic wand, I'd eliminate the Ditechs and the Lending Trees of the world along with all the people that are just focused on rate.

Did you know that a lot of Realtors are still advising their clients to this day to put more money down on their homes? They don’t realize that years down the road, when that client wants to pull equity out of the home, it may not be tax deductible. They’re advising clients who are buying homes for a million dollars to pay cash for a home. Then the client comes to a seminar of mine and realizes, "Wow, I need to pull equity out." Guess what? It's not tax deductible now. You're going to have to sell that home and buy another one to reestablish your acquisition indebtedness.

If I had a magic wand, I would change the mind set from rates and fees and lowest rate to more of a focus on how to incorporate a mortgage into your life.

In Touch Today: What are your current goals?

Sean: We plan to generate $50,000 to $100,000 a month in gross revenues as a group. We only have four people on our team, plus a contract processor.

We have more fence-sitters than ever before lately. People don’t know whether they should buy or sell. They're just frozen. So we're getting laser-focused on our groups of thrivers and arrivers, and showing them how to leverage what they have and reposition some of their assets to optimize or maximize everything and build wealth.

For example, I have one client who lives in Arkansas. He owns 34 homes in Texas. He owns 20 of them free and clear. So he has 34 mortgages which potentially need refinanced. Then I have another client who has 15 homes as rental properties. He has a lot of equity in some of them, no equity in the others. We need to reposition everything for him, sticking that equity into safe liquid side funds to grow his net worth and allow him to access that money tax free in retirement. That's 34 with one client, 15 with another potential business this month.

We're trying to take on fewer cases, but maximize all of them. It all has to do with repositionable assets, home equity being the largest repositionable asset. The sales cycle isn’t that long. Once our clients realize the value of what we’re providing, the process moves through really quickly. It’s no different than doing a refinance or a straight rate and term or a purchase or anything else.

In Touch Today: Is there anything else you'd like to say to other originators who aspire to the kind of success you've created?

Sean: Don't get caught in the commodity trap. Do something different. It doesn't matter what it is, just do something different. Make it unique. If you can create a unique experience for the client, you'll separate yourself from the competition.

It's like Starbucks. It costs $0.02 to make a cup of coffee at Starbucks. Why do we spend $4? It's a unique experience. We have good music, comfy couches, stuff like that.