Don’t Spray and Pray

Like any other relationship, working with a Broker is a two-way thing. And to get the best from the relationship there needs to be mutual trust between both parties. So, here are our Top 5 Tips to selecting the right Broker Partner:

1. Enter with the right mindset: Think of it as a partnership. You both want the same outcome.
2. Take your time: The best investment of your time is choosing the right Broker. Speak to 3 and then decide who is best.
3. The Broker represents you: It could be the best deal a lender has ever seen, but if you’re using a bad broker then the lender questions how good your judgement is.
4. Don’t spray and pray: The quickest way to ruin your reputation is to engage multiple brokers on the same project at the same time.
5. Be strategic: probe the broker on who they are going to approach and why? If they can’t answer you the truth is they probably aren’t experienced enough to deal with your case.

 

Right Mindset:

As a broker, I always like to put myself in the client’s position when trying to decide what I think is the best course of action. For example, if a developer is trying to decide whether to sell or re-finance a scheme they’ve recently built, I’ll pretend I’m the client and apply my 15+ years of experience of the mortgage and property markets. If the best thing to do is to sell, then that’s what we will say.

I believe it is this approach, that sets us apart from most of our competition, rather than trying to do a deal that we don’t truly believe is in the client’s best interests.

 

Take your Time

So, if I was a client that was trying to find the best deal for their new property transaction, how would I go about it? I use a broker for my own mortgages. My own mortgages tend to be smaller than those I arrange for clients and the high-street market is a specialist market, and I acknowledge that other people know how to navigate this market better than me.

Fortunately, I know a lot of brokers, and I know the difference between a good broker and a bad broker. In my opinion, a good broker wants to build relationships, a bad broker is a salesman and operates on a transactional basis.

If I didn’t know any brokers, then I would do the same as I do for any other service; speak to 3x providers and then decide as to which one is best and engage with one of them.

 

The Broker is You:

The best way to think of this is to think of your broker as a personification of you in the market; they represent you and what you’re trying to achieve.

Do not engage with multiple brokers, as it damages you and your credibility as a person.

If after a few weeks, you’re not pleased with the progress your broker is making, then engage another broker, but let the first broker know.

 

Spray and Pray?

Imagine being a lender and you’re approached by a Broker who talks you through a deal. You get excited about it and spend the next couple of days working on it and send your terms over. Two hours later you see the same deal from another Broker. In that moment, as a lender, is your opinion about that client positive or negative?

This is the fundamental point that most clients miss. Deals that are done in the specialist market are done on trust and the strength of relationship. If a lender sees the deal from multiple brokers, rightly or wrongly, the lender thinks the client is a timewaster and not someone they want to deal with.

Fortunately, most of our clients have been with us for 5 years or more, so they understand this point. But every action has a reaction. If you set multiple brokers in play, not only are you wasting their time, you’re also wasting the time of the lenders they speak to.

We’ve had situations where we’ve spoken to lenders about prospective clients and the lender has said they don’t want to deal with that client as they have had their time wasted before. The client’s reputation is absolutely trashed in the market and they may never have spoken to that lender directly.

 

Be Strategic:

As a broker we always take a considered approach, and our first step is to shortlist lenders based on our knowledge and experience. At this point we are having high-level conversations with lenders about the deal metrics. At this first stage, we will never send personal details or specific property details to lenders. It’s important that our client’s privacy is protected until we know the lender(s) is serious.

Once we have garnered interest we will feedback to our client and confirm the next steps. Normally, this involves us going to the next level of detail, so we can finalise our options and then negotiate further on the deal specifics.

As a client you should be questioning your Broker on how they might approach the market. We hear of examples from lenders, where brokers send passports, credit files, bank statements and valuation reports all on the same email to 30 different lenders on the same email. This is an incredible breach of client trust & privacy and looks desperate. The market is a small one at the levels we operate at, and the lenders speak to one another so the smell of desperation travels quickly.

Like any other service you employ, you need to be careful who you work with and that they have your best interests at heart.

 

 

Author: Ian Humphreys

August 2019