Broker Comm's

[kidd1]

My partner & I have just bought our first place, and her parents asked her how much comm the broker gets from the bank we've gone with (BW). Their argument is that we can't be sure if broker is suggesting the right product for us, as it may depend on how much he/she is receiving from the bank in question.

I'm sure someone is able to clear this up for me..?
We have seen 2 brokers, and met with 1 bank directly in the process of buying our first home. And I must say I'd prefer dealing with our broker any day before I had to do do business with the bank direct.

I have been told that commissions for Brokers differs, but they may get an upfront amount of money by the bank, and then another portion of their fee at a later date post-settlement.

I know there are plenty of Brokers on here so any clarification would be great.

Cheers
Steve

 

[Peter_Tersteeg]

Commissions can vary from one lender to another. BankWest currently pays 0.5% of the loan amount upfront and 0.15% of the loan amount as a trail income.

I doubt the broker has recommended BankWest due to the commission levels as these are a little below average. There's plenty of lenders with comparable products that pay more.

Most brokers should give you some sort of document which outlines the loan and the nature of their services, including how they are paid. This document usually discloses the commissions paid by each lender so you can have confidence they're not making the recommendation based on how they're getting paid.

The broker should be able to clearly explain your options and why they've made that particular recommendation to you. BankWest do have some policies that many other lenders don't have, this may be the basis of the recommendation.

 

[kidd1]

excellent, pretty much explained everything I was wanting to know.
Thanks for the reply.

 

[martym]

Kidd1,

I can second PT_Bear. Bankwest would be in lowest third of commissions and I suspect that they were recommended due to a policy they have that suits your situation.