Jim Rademann is evolving his business to meet the latest trends, but still keeps service to his clients and referral sources at the forefront.
For a long-time mortgage originator like Jim Rademann, staying at the top of one’s game may require learning how to use the new tools that are changing the face of the business in order to serve clients better. But the basics of the business remain the same. “You have to deliver on what you say. You have to be customer-service oriented to your clients and your real estate agents.
“That will never change. But technology has changed how the business operates dramatically,” Rademann said.
He finds it is important to have that customer-service focus with real estate agents and consumers as well as doing exactly what you say you are going to do and following through on it.
Rademann has been in the mortgage business for more than 20 years, joining the industry a couple of years out of college.
R&R Mortgage is a business he started with his father 19 years ago. Rademann’s office is in Folsom, Calif., while his father has an office in Orangevale, Calif.
The older Rademann had been in banking before getting into the mortgage business but neither had mortgage experience. When they opened their company, they hired an experienced processor.
“We both had real estate licenses but didn’t know the ins and outs of real estate lending,” so the processor helped them through the learning curve of the business, Jim Rademann said.
In 2009, Rademann did $101 million in production, putting him at No. 20 on Origination News’ top producer list. Last year his volume improved to $107.6 million, in what he termed “a challenging year,” because of the uncertainty regarding the mortgage business in general with the changing rules.
For 2010 his business split was an atypical 50-50 between refinancings and purchases. In a typical year, the balance is tilted more toward conventional home purchase loans.
Approximately 25% of the business is Federal Housing Administration. Of the 75% conventional, 10% are jumbos but the vast majority of originations in his market are the conforming 30-year fixed-rate loans.
Over the years, industry insiders have considered the 30-year fixed more of a commodity-type product. What Rademann has done to make himself standout in his market is to adopt technology solutions.
“We have taken the steps to have the right technology. So we have the things the big guys have, like a neat website (through Myers Internet), items for the (real estate) agents such as resources that they need,” he said, continuing that it is also 20 years of providing a high level of customer service to those real estate agents.
His key to success for doing business with real estate agents: “knowing what they need and then delivering it for them. A lot of it is just really service.”
It begins with working with one or two agents in an office and giving them a positive experience and them sharing it with their colleagues. “All of a sudden you do half the financing for a good size office,” Rademann said. “I went with the approach of 'real estate agents sell homes, their clients need loans and that is where I am going to go.’” As a result, with the exception of one year, his purchase volume has increased annually since he’s started.
He started out looking to work with real estate agents because of the nature of the market 20 years ago. And he did all of what he termed “the generic things” to court them. This meant handing out rate sheets in offices and going to open houses, which Rademann noted provided a more personal touch than the technology driven environment of today.
Being in business as long as he has means that he has built up a past client database of 7,000 to 8,000 names and he continues to market to them. Rademann sends a four-time-a-year newsletter to them with real estate information, house price information and mortgage lending information.
He said he can do more with this group, and he is in the process of converting this to a digital format and thus be able to do e-mail and contact them more.
Real estate agents get contacted three times a week with rates sheets and market news including information on interest rates, loan programs and turn times among other things they might need to know.
Other referral sources include divorce attorneys and financial planners. They will get rate information once a week and a different newsletter with the things which impact their business.
Rademann said he comes up with the articles for his newsletters based on what his clients ask him about. If a real estate agent calls with a particular scenario, he will share that with his database. He does the same with financial planners.
Right now, from real estate agents, he is getting a lot of questions regarding condition of property and what is someone is willing to lend on. So when he is answering one of those questions, he puts the reply into his newsletter format and sends it out to other real estate agents. “It is a great opportunity to establish yourself as an expert within that real estate community,” Rademann said.
Technology does make it easier to keep in contact but it is also easy to get complacent. So, Rademann adds, “you make sure that you get out and still see people at open houses and meet for coffee and all those other things to discuss growing the business.
“I think any of us as loan originators need to make sure that you don’t let technology take over for the personal side of it.”
Rademann does have a presence on Facebook, but that is because his real estate agents are there. He doesn’t use it like he should, he admits, adding that he realizes he needs to expand his usage. That is one of his goals for this year, he said, noting that the next generation of being online is social media. Rademann said you can tell a teenager you still use e-mail and they laugh because they use Facebook to communicate. There are predictions that e-mail will go away in a few years because of social media, he said, adding, “to me, e-mail is still new. [But] you can’t fight that (change); you embrace it and see how you can grow your business from it.” The growth in the use of technology in all aspects of the origination business is what he considers to be the biggest change since he started doing mortgages.
When he started, the loan application was hand-typed, he noted. The request for a credit report was faxed out and the report itself was received a few days later.
Today, a client comes into the office and can automatically get a pre-approval with a credit report and a sample payment schedule.
On the other side of the equation, the growth of the Internet has allowed consumers to shop different mortgage providers.
R&R advertises once a month in its local paper and Rademann feels there isn’t a reason to do more because he is achieving the level of volume that he wants. If the company grows beyond its target, it becomes difficult to manage.
He does work with first-time homebuyers, of which real estate agents refer half and the rest come from past clients, who recommend him to their friends, co-workers and even their children. Housing has become more affordable with the drop in prices and low rates. Their biggest challenge for first-time buyers is that the process does take longer because so many properties are either bank-owned or being sold in a short sale situation. That can be frustrating to the buyer because they don’t understand the process, so Rademann works with the real estate agent to help coach the buyer on what is happening.
In general, consumers are now expecting an instant response, and he notes that if anything has caused frustration in the last few years for clients and real estate agents is the return of the use of documentation in the process.
Rademann’s response is to educate people on the steps in the process and why this is now required. Today’s consumer, even with the media attention on the mortgage meltdown, doesn’t understand that they are affected as a result.
There is no secret to being successful, and there is no one thing to do to magically generate business.
“There is no substitute for time and hard work over a long period of time and your business will definitely grow the way you want it to,” Rademann said.
And that agent you have worked with for a long period of time is being approached by other loan officers looking for business. So you can’t get complacent and need to make sure you are offering the agent all the services he or she needs or someone else will, he said.
