Choosing a Broker - a thread for the newbies
- Thread starter Jess Peletier
- Start date
Hi all
I feel compelled to write this post because last week I had a significant number of people chatting to me after getting horrendous advice from their brokers - advice that could cost them quite literally over a hundred thousand dollars over the life of their loan/s.
If you've found yourself here on the SS forums, you know you have access to AMAZING brokers who know about structure, tax, investment and more. By asking and learning here, you yourself have the opportunity to learn more than many brokers will know about loan structure, tax effects, and the best way to squeeze as much from your properties as possible.
Please do not assume that your local broker will know this stuff - they probably won't. It's not taught in broker school and it's not default broker knowledge.
Please don't assume your broker has the knowledge required to set you up properly simply because he or she is a broker!!
You need to protect yourself, and you need to ask questions so you can be sure they understand investment lending and can relate to what you're doing and what you're hoping to achieve.
Some good questions to ask/conversations to have are -
- Do you invest in property? If so, how many do you have? What kind of investor are you?
- Talk to me about the tax implications of the loans we'll be using. ( Hint - "there aren't any" is the wrong answer)
- Is there any particular structure you'd recommend for my loans? Are you a cross-collateralisation fan-boy?
If you get faced with a blank stare at any point of this conversation, you can be pretty certain they aren't the broker for you and it might be best to keep looking.
Any other key questions/convo points you like/recommend?
Thanks Jess, although there is a lot of competition in the market, great brokers really stand out from the crowd. Loan structuring is something the banks and some brokers are not great at.
At the end a great loan structure, coupled with a great lender and a competitive rate, will win every time. On top of that, great brokers offer a fantastic service that lenders can't match.
1. Do you send your clients anything for christmas...eg a non working scratchy
lol - you might just not be matching up the three symbols correctly. I specifically asked the lady at the Dickson newsagency to give me the winning ones.
Anyways - you'll get another chance in 10.5 months
Cheers
Jamie
The most important question;
"How many quality hours have you logged on Somersoft honing your trade"
"How many quality hours have you logged on Somersoft honing your trade"
The most important question;
"How many quality hours have you logged on Somersoft honing your trade"
Only, every day for 16 years
The most important question;
"How many quality hours have you logged on Somersoft looking for chips people throw"
Fixed it for you!
This is so true for me as well. I've been through a couple of highly recommended brokers on these forums (of which one of them has posted in this thread on how to select a good broker) and almost exactly the same scenario. First one was unresponsive and I was clearly very low on the priority list for the second one. Extremely annoying for simple transactions which I had to push and push to get done.
DON'T just rely on the brokers recommending each other, happens a lot on this forum. A lot of back patting and hand balls to each other. I would suggest speaking to other forum members who are not brokers ask them for recommendations, most would of had had dealing with the brokers and are able to give feed back.
This is a good point and I hope it's not viewed as broker bashing because it's not.
I've had a few ask me over the years so I'm sure forum members asking each other is common.
I have to agree, how people can give recommendations on services that they have never used does not make sense.
You dealt with someone who ignores you?
That would be a clear sign early on in the peace to not proceed. Would you continue to engage with a person if they ignored you face to face?
Goes both ways BTW. People make contact, you provide excellent service, go the extra mile, collect a fact find, asses the objectives, map out a plan to action, order vals and are good to go only to hear crickets chirping.
Make a follow up phone call/email and then be given an excuse/reason why said person is not proceeding even though everything adds/lines up.
You have wasted hours of your time for zip and have to chase the person up who initiated the whole thing. Just saying.
As far as brokers recomending brokers I see nothing wrong with that as all professionals will refer each other without personally having used each others services. Its a risk initially and if you have a bad experience let the referer know.
If you bring someone into your inner circle then you are responsible for the outcome, period.
Many of the brokers on the forums weren't always brokers. I've had several of my properties financed through brokers prior to becoming one myself and several of my clients have become brokers. Also not all lenders allow us to write our own loans, so if I need a loan from one of these lenders I also have to get someone else to do it (needless to say I'll make it as simple as possible for them).
Like many people on the forums, the brokers here do talk to each other quite a bit behind the scenes, probably more than most people realise. On one level we are in competition, but we also collaborate and help each other out. One of the hardest things in small business is being isolated. Sometimes talking over a challenging problem with someone else can help you see the answer right in front of you.
I'm fairly certain I know more about some of my colleagues than most of their own clients.
Like everyone else, if you're after a referral, I'll refer you to someone I know and trust. If you're not going to use my services, I'd rather you work with someone I know is up to the task.
I'm definitely not going to recommend someone who I think would do a bad job. That makes me look bad by association. Fixing another brokers mistakes also tends to cost the second broker more than it earns.
All nice points, but still a client relationship is different to a peer one. My comment still stands - recommendations without using someones services carry no weight for me.
Kudos to Brady for highlighting, what goes on here is almost self promotion by proxy. Have to mention it's not just brokers, same applies to buyers agents and other property services whom people feel obliged to recommend without using.
Um thanks.
See the last line of my last post
Yeh I saw that, does that cover financial loss in the case of someone you recommend screwing up? You'll wear the cost?
No words needed.
Nope. Do you do everything people tell you too blindly?
Personal responseability seems to be going the way of the dodo these days.
OK. So what are you responsible for if the outcome is not satisfying?! I love sexy sounding lines like yours above, that when questioned, don't hold any weight.
and no, I don't do things blindly. I listen to recommendations from people who have experienced a service I want to engage, instead of taking recommendations from people whom have never engaged said service.
Feeling like fish n chips for lunch now - thanks Jim!
