If there is one thing I have learned in my 17 years of mortgage brokering, is that the ‘Experts’ know nothing and the ‘Market’ is largely between your ears. It always seems odd to me that we spend years and years studying, observing and gathering data to try and predict what might happen next in the marketplace.
I don’t care how many PHD’s you have in Economics, there is no way anyone can predict with any certainty what is going to happen in the future. All of the predictions are based on dozens of assumptions and if any one of the factors in those assumptions change, then that prediction is right out the window.
The U.S. gets downgraded by S & P… the world changes, someone flies a plane into a building… the world changes. While I agree that understanding market fundamentals is important, I think far too often we put too much emphasis on what the ‘Experts’ are predicting and let that guide our business and sales habits. Spend your time and effort increasing your skills. The bottom line is to ignore the headlines, ignore the predictions and focus solely on being the best mortgage broker you can possibly be.
One of the biggest advantages we have as a channel, is that we have a very small market share. Yes, you heard me right, our relatively small market share is an advantage. In a shrinking market we still have the ability to maintain or even grow our overall numbers simply by getting better at what we do. Even if the overall pie shrinks, we have a very real opportunity to grow our share of it to maintain or increase our volumes. This is why I am so vehement on raising our level of professionalism. What we do is of significant benefit to our consumer yet in 2010 $160 Billion worth of mortgages did not ‘get it’.
Let’s take a look at some real numbers to see what I am talking about. The table below summarizes the overall mortgage market in Canada according to CMHC (I have rounded and summarized to exclude non residential mortgages, so figures are not exactly as reported by CMHC).
Year Volume in billions
2008 215 Billion
2009 244 Billion
2010 229 Billion
Depending on who you talk to the Broker market share is somewhere between 25% to 30%. Let’s be optimistic and assume that the number is 30%, that means that in 2010 the broker channel originated 68.7 billion dollars of mortgages. That sounds like an impressive number but let’s look at the other side of that equation. There is a whopping $160.3 billion available that the broker channel is not touching. So again I have to ask the question… “Why the hell are we competing with each other?”. Why do we support websites that pit us against each other and teach the consumer that shopping brokers to bid against each other is an acceptable, and even smart practice. This one is a topic in and of itself so I will save that for later.
You and I cannot control the market, but as we have just discussed. The good news is that WE DON’T NEED TO! We CAN control how good we are at what we do. So let’s stop focusing on what the market is doing and start focusing on what we are doing as a collective to increase our market share.
What are you doing to grow your share of the market? What can we learn from each other? Share some of your best practices in the comments below.