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In light of recent articles regarding commissions coming from developers and project marketing companies, I thought I would take the time to jot down a few things that I have experienced in the last 12 months when it comes to developers working with brokers to move their product.
We all need a distribution channel and we all need to ensure that our value proposition is strong and compelling. Developers use the broker market as a very effective distribution channel and hire project marketing companies to build their sales proposition. There is no doubt there are many great companies out there working with high-quality developers and builders with the intention of building high-quality products and delivering. Unfortunately, we need to be careful of the ones that aren’t.
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I often get approached by sales people from project marketing companies to talk about their product and what they offer to clients. I always do my best to ensure the property is going to value up on completion, which is always the big question I ask if they have some examples of past completed projects. I ask if they can show me around one of the complexes so I can see the product for myself – if I wouldn’t buy it, why would I want my client to?
Pamphlets are always a bit deceiving. The way I respond to these propositions is pretty simple to start with – if their opening statement is “I can pay you two per cent, or I can pay you $10,000”, then the phone call is terminated. Someone has to pay for that, and that’s going to be my client.
However, if developers can provide a true investment solution with reasonable prospects of growth or a great rental yield, and they want to talk to me about how this property is going to be better than the other 15 buildings in the street, I’ll feel much more engaged in the discussion and want to see what they’ve got. The customer can start way behind the eight ball when there are three or four different people getting their $10,000 – it’s not fair on them when they’re trying to start a portfolio and someone sees an opportunity to get a quick win for their pocket. It quite often is the first-time investor too.
It is great the industry is aware of this, and I think it will help improve the protection of our clients. As we all know, if our clients don’t have 100 per cent trust in us, we don’t have a job.
Sean Murphy, senior credit adviser, My Mortgage Freedom
Starting his finance career at Liberty Financial in 2007, Sean developed a passion for specialist lending and the challenge of finding a solution for every client.
Having been a BDM at Liberty for almost three years, Sean decided it was time to move on and joined My Mortgage Freedom in the beginning of 2014. Sean's background in SMSF lending and non-conforming residential and commercial mortgages gives the team great scope when dealing with their clients.
Sean's objective is to work with a range of clients in different situations to assist them no matter how challenging the transaction might be.
