Golden Rules Part 2 by Stewart Mednick

by 05 Feb 2009
This is a continuation of last month?s column. 4. Benefit ? Cost = Value The ultimate goal in any transaction is to offer a good product at a fair price to the satisfaction of the customer. In this formula, ?cost? is the fair price. Cost can be monetary, emotional, time, or effort. Cost is measured by the customer. You offer benefit. If your benefit far exceeds the customer?s cost of the transaction, then the customer will experience an inherent value. The greater the benefit you offer, more enjoyable or pleasurable the experience will be to the customer and the greater the value they will have for their investment. 5. Listen to the words, not an interpretation in your mind. This is a personal pet-peeve of mine. I hate when people interpret what I say instead of listening to the literal meaning of my words. I am sure we have all had a disturbing experience of this. For example, I would tell a client that I MAY be able to lock in at a certain rate for them. The next day they want to know if I DID lock in that rate because I said that was what I would do for him. That client interpreted my words to mean I WILL perform that task when I said I MAY be able to perform the task. This may also run the other way when a client talks to you and you may interpret what they say. The sure-fire cure to avoid this is a military concept call ?repeat back.? Simply repeat back to the client what was said so the words are clear and no misinterpretation is conceived. CLIENT: ?I want a 30 year mortgage and I prefer a payment below $1200 per month.? LO: ?I understand that you want a payment below $1200.? CLIENT: ?yes, that includes escrow.? LO: ?So, you want a $1200 per month payment on a 30year mortgage that includes escrow. What if the payment is over that? You said that you prefer it to be under, will you consider a bit of a higher payment?? CLIENT: ?That will be fine, just let me know that best monthly payment you are able to get for me?.? In this example, may variables that were not fully understood or possibly misinterpreted could have gummed up a solid deal and turned it into a nightmare for the LO. Repeat back to the customer for clarity and make sure nothing is interpreted. 6. Don?t make assumptions. This is an obvious, but dangerous Golden Rule. I made the mistake many times of assuming that a client may want something, and performed that task. It bit me in the butt. The classic situation was when I was working on a refinance for a recently divorced female client. The property was not properly documented on title, so I took the liberty of having it corrected for her at a small additional cost to the title fees. When I told her of the correction at the closing, I thought I would be adding value by performing this act. Instead, she became angry stating that this was supposed to have been accomplished already by her husband?s lawyer as part of the divorce settlement and she walked out of the closing. My assumption of a good deed was a deal-breaker. If any question arises, or any parameter of the transaction is not clear, do not assume and find out what is expected. 7. The customer does not always know what they want, nor is always right. The customer is always right. Wrong. The customer does not always know what he or she wants. The customer is as right as the knowledge held on the topic. This dovetails a bit into the last Golden Rule about being the expert. A customer may want a 30 year fixed rate just because it is the lowest interest rate available. The customer may not be aware that another type of mortgage exists that could be a better fit for the customer?s needs. You are the professional and with some basic education to the customer, the options may be clearer. Always ensure you know exactly the customer?s intentions and goals in every transaction, so you can serve his or her needs completely. 8. You are the expert, not the customer. This ties nicely with the previous Golden Rule. Many times the customer will want to drive the transaction in the direction he or she thinks it should go. That could be a recipe for disaster. Ensure that you serve the customer in a professional and courteous manner in explaining the benefits and detriments to various situations and scenarios. Provide complete information and listen to the customer. The customer may want to flex some knowledge of the business, but you are the expert. You can serve the customer best by driving the transaction in a manner that benefits the customer the most. I hope these Golden Rules help. I am sure many of you reading this column have rules and guideline that you follow. I would love to hear them and perhaps write a follow-up column of Golden Rules that you use. Many of these rules may translate well into your everyday life. The gist of these rules is to be ethical, professional, honest, passionate and fair in all you do. Stewart Mednick is a seasoned mortgage banker and published author. His writing focuses on relationship development, personal empowerment, customer satisfaction, marketing and sales techniques. Stewart is available for marketing consulting, personal coaching and training sessions. If you have a comment or a question for Stewart, contact him at 651-895-5122 or


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