It takes a lot of grit and effort to succeed in the mortgage business. After obtaining your mortgage broker license, you spend your entire career honing your customer service skills and increasing your industry knowledge. Most importantly, you’re always looking for ways to grow your client base.
If you succeed, there will be a point when your business grows stagnant. Anticipating the amount of business you can draw out of your local real estate market is not realistic. If you’re running out of ideas that will help bring in new customers or referral sources, it may be time to obtain mortgage broker licenses in other states.
Why Not Just Hire More MLO’S at Your Current Location?
Every brokerage is unique in how it operates. You build your establishment and train your staff differently than your competition. People are attracted to you based on your personnel and business model. Once you have enough brokers working for you, you’ll run into several issues:
- Sticking to your methods.Mortgage brokerages tend to be relatively small. It’s challenging to keep hiring while also ensuring that your employees operate how you see fit. Although you can hire managers and split your company into groups, it’s never the same as having one person running the show.
- Point of diminishing returns.If you’ve maximized the business you can get out of your local market, it will be inefficient to hire more brokers. Doing so will only mean that you’ll have more employees chasing the same business and stepping on each other’s toes.
- Limiting your opportunities.Even if you haven’t maxed out locally, you’re still limiting your growth by staying in your state. If you’re willing to venture out of town, you can open up a new world of opportunities.
While opening an out-of-state branch is costly and time-consuming, it will enable you to bring your brand to new markets currently unavailable to you.
For Individual Licensees: Why Not Increase Your Efforts Locally?
Besides the fact that most markets are limited, you’re losing out on several advantages by not expanding to other states:
- Potential clients who leave town.Friends, family members, or former clients who relocate out of state cannot use your services.
- Online Marketing.If you operate in multiple locations, you’ll get a higher return for every dollar you spend on online marketing. You would be using the same money to target a larger area.
- If you’re doing your job correctly, you are contacting real estate professionals and going to events to meet new referral sources. Many either have clients or conduct all their business in another state.
Increasing the number of licenses you hold will translate into more business and fewer deals left on the table due to a lack of qualifications.
Do All States Have the Same Licensing Requirements?
While many states have similar requirements, each state’s nuances differ from others. The following are a few examples:
- Some states allow you to operate online, while others require a brick-and-mortar location.
- Surety bond obligations for new branches range from $10,000 to more than $150,000.
- Education requirements for new licensees are typically 20 hours, but some states require more.
It is highly unlikely that you’ll find a state with the exact requirements as yours.
It takes courage and perseverance to leave your comfort zone, but it’s a great way to grow your pipeline of business. To find out more about becoming a multistate mortgage broker license holder, and for help with weaving through the regulatory obligations, call (866) 576-7726 or email us at firstname.lastname@example.org.