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By David Lykken
President and managing partner
Mortgage Banking Solutions
Niches, Spelled Out
Key characteristics often pop out in brokers who truly work their specialty
you’ve likely noticed how some
mortgage brokers have a knack for
discovering the newest and trendiest
niche markets.
Beyond that, have you ever wondered what makes them successful
in that market once they’ve found
it? If so, understanding some of the
characteristics that make brokers successful in their specialty markets may
help you find similar success in your
chosen niche.
By breaking down the word “niche,”
we can associate some important
terms and phrases with each letter:
N • eutral
I • ntuitive, innovative, intense
C • autious, confident, creative
H • its hard
E • volve or exit
Each often is essential to standing out
in your specialty. Here’s a closer look.
Neutral
Brokers who identify important market niches before others generally
take pride in being neutral observers
of industry trends. They look at the
market free of biases and pay careful attention to what they see. Those
who spot important trends and find
success in them tend to be pragmatic
rather than opinionated.
For example, in the mid-1990s,
subprime (aka, nonprime) loans
emerged as niche products. Many A-paper lenders turned up their noses.
As time went on, and as subprime
products became more mainstream,
many brokers jumped on the bandwagon. Before the problems of the
past few years, many also found sustainable success.
By being — and remaining — neutral, many brokers who entered the
subprime-lending niche early also
recognized when it was time to exit.
You can do this, too, but you must
remain objective regardless of how
profitable or popular a niche market
seems — or doesn’t.
Illustration: Dennis Wunsch
Intuitive, innovative, intense
Brokers who concentrate on developing new niches before industrywide
adjustments lead the masses to the
same place tend to be intuitive and innovative. Beyond that, after they lock
on to an idea, the early adopters pursue it with great intensity. Often, this
intense passion comes from their intuitive beliefs that the market will soon
require a huge increase in that specific
type of lending. When these beliefs
prove to be correct, huge profit margins typically stand close at hand.
When innovation and intensity
meet, incredible things can happen.
This can be the result of nature —
right-brain thinkers, for example,
tend to be more intuitive than left-brain thinkers — but it also can be
developed. Brokers can increase
their level of innovation by making
cognizant attempts to observe market conditions and to apply insightful solutions to existing problems
and trends. This isn’t easy, but when
done correctly and with intensity, the
results can be powerful.
ways, it’s that creativity that allows
these brokers to see and develop
niche markets that others overlook.
In attempting to identify your own
niche market, try to think about things
in a way you never have before. If you
do, you might realize that the next
great niche is right before your eyes.
new. Right now, there likely are wealthy
mortgage brokers traveling the globe
and thinking back on their time at the
top of subprime lending. They also may
recall that moment when evolving with
the market seemed too risky and selling their business was too profitable to
turn down.
In fact, what might seem like luck to
some of us was probably something
far more complicated. •
Cautious, confident, creative
Despite their passion, brokers who
find early success in new niches tend
to be cautious thinkers. This goes
along with being neutral. After they
sense an opportunity, these brokers
often approach it confidently, but
cautiously.
In addition, their approach often is
creative. Although this approach can
be difficult for others to understand,
it is crucial to their success. In some
Hits hard
After they’ve decided that their intuition is correct, brokers entering a new
niche often hit it hard. They are laser-focused, have a strong work ethic and
chase success tirelessly.
They seem to realize that they have
a small window of opportunity before
the masses catch on, and they don’t
waste time.
Evolve or exit
Perhaps the most amazing characteristic of early niche-adopters is their ability to evolve within their specialty or to
decide it’s time to look for something
David Lykken is president and managing
partner of Mortgage Banking Solutions. He
has more than 34 years’ experience in the
mortgage-lending industry. His knowledge and
skills comprise a blend of loan-production and
management strategies, business operations,
and technology. He has been quoted frequently
in national publications on industry-related
issues and provides legal-expert-witness
services for several leading national law firms.
Reach him at (512) 977-9900, ext. 101, or at
dlykken@mortgagebankingsolutions.com.
The company’s Web site is www.mortgage
bankingsolutions.com.
