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What to Do and Say When You Screw Up

I want to share an embarrassing story with you because I think it might be helpful. We all do embarrassing things every now and again. What matters is how we handle the situation from that point forward.

I won’t bore you with all the details, but here’s the bottom line. When I first got in the business over two decades ago, I went to my branch manager and said, “Hey, I screwed up. I think it’s going to delay the closing. What do I tell the borrower and the realtors?”

I was petrified. I really didn’t want to make that phone call. I’m a non-confrontational person to begin with. Confrontation just isn’t my style. It’s way outside of my comfort zone. I wanted to just avoid the phone call altogether. 

It’s not just me. This is a mistake a lot of people make. There are a lot of us conflict avoiders out there. Thankfully my manager had some helpful wisdom for me.

Encouraging Advice from My Branch Manager 

Here’s what my branch manager told me: “Carl, first of all, understand that things happen. Everybody makes mistakes. We just don’t want to be making the same mistake two or three times, right? We make a mistake, we learn from it, we make some tweaks, make some adjustments, and we press on.”

Then he said, “You know, these are successful agents we’re working with. They have several deals going on at any one given time. This problem isn’t the first problem they’ve had. It’s probably not even the first problem they’ve had this month. They know things happen.”

Now, what I will say is that the lower-producing agents are a different story. They might get more bent out of shape because they don’t have any other deals closing this month, and they need to make their own mortgage payment, so it’s a much bigger deal for them. And who could blame them, right? But most of the agents we’re working with are going to be the higher-producing ones.

So, when something goes wrong that puts the closing in jeopardy, you need to immediately call the agents and the borrowers. I always call the title company too. The important thing is to communicate. Maybe it’s your fault; maybe it’s not. In this case, it was definitely my fault. But you have to communicate—and as quickly as possible.

The 3-Step Formula

Then he gave me a really helpful formula that I’ve never forgotten. Here’s how you do it:

  • Step 1: here’s what happened
  • Step 2: here’s what we’re doing about it and here’s where we are now
  • Step 3: here’s what we’re doing to prevent it from happening again

Let’s break each of these down. 

Step 1: Here’s what happened. So in other words, tell them exactly what happened, right? 

Take responsibility. It’s what leaders do. Put your big girl or big boy pants on and have the conversation. Enough said. 

Step 2: Here’s what we’re doing about it and here’s where we are now. Tell them what action steps you are putting in place and your prediction of if or when it will solve the problem. Sometimes a problem just isn’t solvable. Maybe the borrower went out and bought a his-and-hers $80,000 Tesla and now they don’t qualify for their loan. You can’t fix that one, but most problems have a solution. 

Step 3: Here’s what we’re doing to prevent it from happening again. Tell them what action items you’re putting into place so that this won’t happen on the next referral they send over to you. It’s very rare that I make a mistake or something goes wrong and a realtor never sends me another deal again. They’re almost always very understanding and give me another chance. They know that these things happen, and they respect and appreciate my upfront communication and owning up to what went wrong.

Why This Formula Makes You Better and Stronger

I found that this formula de-escalates high emotions and helps you put a better team and system in place for your ever-growing business. Ignoring the issue or hiding in the closet? Those never turn out well. And they end up just adding to the stress you’re already experiencing.

And, again, I seldom lose business relationships when I follow this formula. And, frankly, by following this formula, my business today is a very well-oiled machine, because we continue to improve the systems and make sure that the team members are all A-level players because of these past issues. Something goes wrong, and we put a better system in place or replace the person if they keep messing up. If this happens two or three times, maybe it’s time to replace someone.

Nobody likes it when things go wrong. But no one is perfect. When things go wrong, do what leaders do—communicate with all the parties involved and then work on your system to keep it from happening again. Put a better system in place. Maybe a new person. Now that new system and/or new person goes forward with you. 

We need to understand that our growth never comes from our best times. Our growth always comes from our worst times. It’s not until somebody puts weights on the barbells and causes resistance that you grow your muscles. 

Now, don’t misunderstand. When things go wrong, I don’t say, “Oh, golly gee whiz, a chance to grow! Yay!” Of course I don’t do that. I get miffed, disappointed, aggravated, just like everyone else. But I’ve been around long enough to know that this mess-up will help me build a bigger, better, faster, stronger machine as a result.

A Surefire Way to Make Mistakes Less Painful

Another key to all of this is to simply get more referred leads. It’s way more likely you’ll close more loans when that’s your focus. I find that a lot of people are afraid of making mistakes, so they don’t push boundaries; they don’t take risks. And that’s just a huge mistake.

Take Tom Brady, for example. He’s one of the best quarterbacks ever, and he still gets intercepted sometimes. He still fumbles every now and again. It happens, right? It doesn’t mean he’s not going to throw long passes or run with the ball. Of course he is, or he won’t win the championship.

Once you have more qualified referred leads, a single deal going sideways won’t ruffle your feathers quite as much, because you’ve got so many deals coming through your pipeline. I’m not trying to minimize things going wrong. Of course we don’t want that. But when it happens, just communicate, make adjustments, make tweaks, and then aggressively go out there and jump back on the horse.

It happens to the best of us. The only people it doesn’t happen to are the people who aren’t closing any loans.
Speaking of closing more loans, we’d love to help you accomplish that by helping you get more qualified referred leads. If you’d like some help, you can set up a one-on-one Zoom call with us where we’ll map all of this out for you, just like we do for our high-level Freedom Club members. It’s simple, easy, and doesn’t cost you a thing. Click here to schedule your FREE call TODAY.