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With significant change on the horizon after the release of the proposed “best interests duty” legislation, many mortgage brokers I work with are considering ways to innovate and add value for their clients by providing point-of-difference services that have not traditionally been offered by the industry.
The proposed changes to the National Consumer Credit Protection Amendment (Mortgage Brokers) Bill 2019 is a hot-button topic at the moment and have some brokers already uncovering inventive ways they can operate in the best interests of, and improve outcomes for, their clients.
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In fact, many broker market leaders are telling me they are thinking of this (potentially seismic) legislative shift as more of an opportunity than a threat.
Mainly, this is due to these legislative changes motivating them to think outside the box when referring clients to unique third-party services that may improve their overall buying experience and satisfaction.
While brokers have traditionally been the conduit for referring clients for services such as insurance and legal advice, in an era of modern business, there are myriad other services that can support consumers on their property buying journey.
Some brokers are seeing expert property negotiation for buyers (not to be confused with the work of a buyer’s agent) as one method of going over and above for their client.
Price negotiation is often an overlooked blind spot and this is one area where mortgage brokers can potentially have a huge impact on their clients’ long-term financial health, as impacted by the final purchase price and subsequent loan interest and stamp duty.
While brokers are well-versed at seeking the best client outcome via their referral partners in legal, finance and other industries, in my experience, helping the buyer secure a property sooner and for less money has — oddly — never really been a priority.
I’ve always found it unsettling that, most of the time, buyers are sent in like lambs to the slaughter come negotiation time. They are rarely afforded any protection against over-paying or other pitfalls during one of the most financially monumental moments in their lives.
From where I sit, when buyers are offered an expert property negotiation service, the end result is they are generally happier across the board, for obvious reasons. Mainly, this is due to saving significant amounts of money; sometimes tens of thousands of dollars under their pre-approval limit.
Home satisfaction is another huge factor. As a result of having someone with experience negotiate a lesser price on their behalf, buyers often have less regrets and are more satisfied because they have been able to purchase a more suitable or higher-quality home. That could mean buying a house in a better school zone, or one which has a nicer view or is closer to the beach, for example.
While the benefits of property negotiation expertise for the buyer are more obvious, there are flow-on advantages for brokers, too.
Often, the brokers I speak with vent their frustrations around constantly investing hour upon hour preparing their clients for purchasing a property, only for them to be outbid at auction or beaten in a race to the finish line in a highly competitive private treaty.
Much of the time, this can be due to their client being completely out of their depth at the pointy end of property negotiations.
Having access to a professional property negotiator can also help brokers streamline their business pipeline by ensuring their clients have the best possible chance to get into a property faster. This can heavily reduce brokers’ administrative duties by lessening the chance of their client repeatedly trying and failing to secure properties.
Borrowers need to re-apply every 90 days to keep their pre-approval ‘live’, so ensuring the buyer finds what they are looking for within that time — and secures it faster — reduces days on market in terms of a brokers’ pipeline of pre-approved clients, which may have been adversely impacting administration time.
It’s clear to many that, now, more than ever, is the time for brokers to set themselves apart from the 14,000 registered practitioners in Australia; to leave no stone unturned in the pursuit of improving outcomes in the best interests of their client, by putting them in the strongest possible buying position.
With a more client-led broking approach, buyers will be more satisfied with the service they are receiving and this can only serve to position brokers as market leaders, grow their referral networks exponentially, streamline their business and —ultimately — win them clients for life.
