Building sticky business

Oxygen Home Loans broker Peter Ellis says it takes perseverance, hard work and a healthy amount of reliable referral partners.

And Mr Ellis would know.

Last year, he wrote $81 million in loans and provided his services to more than 100 clients.

During his nine years as a mortgage broker Mr Ellis has serviced over 700 clients. Many of them are long-term clients.

“Repeat business is crucial to my success as a broker,” Mr Ellis says.

“If you treat the client with respect and make sure their customer service experience is excellent, you can be guaranteed of securing their repeat business.”

One customer service technique Mr Ellis stands by is to action each phone call or referral lead within two hours.

Mr Ellis says brokers should action every lead immediately because “if you don’t, you are not doing your job properly”.

He also likes to keep his clients regularly updated on the status of their loan application and says brokers should not be afraid to do this.

“Often, brokers have about three scheduled client touch points, but between my assistant and I, we make sure we get in touch with the client a lot more regularly than that,” says Mr Ellis.

KEEP IN TOUCH

Staying in regular touch with clients is one of the secrets to becoming a successful mortgage broker. But success also depends on hard work.

Mr Ellis is no stranger to having to roll up his sleeves, having worked 12 to 13 hour days for most of his career.

“Luckily for me, I love what I do, so I have never begrudged working those long hours,” he says.

Mr Ellis also attributes some of his success to his referral partners.

In fact, 50 per cent of his business is generated through his referral partnerships.

After reading a news article about a mortgage broker who was sued for not providing mortgage protection insurance, Mr Ellis decided it was time to diversify his business.

Having weighed up the options, Mr Ellis set his sights on establishing a strong referral partnership with a financial planner who could advise his clients on the best insurance package for their needs.

But although he considers such a referral relationship to be essential rather than convenient, Mr Ellis says brokers should take care “not to team up with [any] Joe Blow financial planner down the street just so they can say they offer insurance”.

“Brokers need to do their homework and research which financial planning business or referral partnership will complement their needs and the needs of their clients,” he says.

SIDE BY SIDE

Mr Ellis found a complementary referral partner in a financial planner. But Oxygen Home Loans also benefits from other referral partnerships – such as that with McGrath Real Estate.

Based in Sydney, Mr Ellis operates out of McGrath’s Edgecliff branch.

Being in such close proximity to his referral partner works to his advantage. More than 30 sales agents are a source of client referrals.

Mr Ellis says being able to work alongside his referral partner makes a difference to his bottom line.

“I honestly do not believe that my business would be as strong if I wasn’t working in the McGrath sales office. The agents would be less likely to refer business on to me if I wasn’t sitting right in front of their nose,” he says.

Of course, not every broker is able to work in the same building as their referral partner. But Mr Ellis says there are other things brokers can do to ensure their referral partnerships remain strong.

“We pay commissions to all of our referral partners,” says Mr Ellis.

“Every time they pass a potential client on to us, I pay them an upfront commission.”

In recent months, Mr Ellis has focused less on loan writing and more on mentoring brokers coming up through the ranks – including training nine brokers to prepare them to go in-house at McGrath real estate agencies across Australia.

“Our aim at Oxygen home loans is to have a broker operating on the ground floor of every McGrath real estate agency,” he says.

Of the brokers Oxygen Home Loans’ recruits, most are highly experienced. But Mr Ellis says they still require training in order to understand the “Oxygen and McGrath real estate relationship”.

“Through my mentoring role I hope to train 20 brokers before the end of the financial year and help them become successful businessmen,” he says.

LOOKING AHEAD

Between his mentoring program and own loan writing business, it seems 2010 is going to be a busy year for Mr Ellis – made all the busier by continued high levels of property activity.

According to RP Data’s Hedonic Home Value Index, Australia’s housing market has enjoyed a strong start to 2010, recording a solid 1.8 per cent capital gain in January – up from the 0.3 per cent drop recorded in December 2009.

Auction volumes are higher than the same time last year and the national weighted clearance rate average is a very healthy 73 per cent.

Mr Ellis says he believes investors and upgraders will dominate the market in 2010.

“That said, I don’t think the bottom has fallen out of the first home buyer market just yet,” he says.

Although the federal government has wound back its boost to the first home buyer grant, Mr Ellis says historically low interest rates will encourage first home buyers to continue to enter the market.

“Low interest rates means demand from all property sectors is still relatively high, which is very promising.”