Mortgage Broking Business

[Rolf Latham]

The role is working under a very successful broker at loan market inside a ray white office so I'm hoping there will be a decent number of leads generated through that alone.

Much will come down to your remuneration structure and the % of enquiries that actually settle.

Typically, this type of lead will be much tougher to work with on the part time basis you seek, unless you have exceptional people skills and your mentor group really holds your hand much of the way.

ta

rolf

 

[Marty McDonald]

Much will come down to your remuneration structure and the % of enquiries that actually settle.

Typically, this type of lead will be much tougher to work with on the part time basis you seek, unless you have exceptional people skills and your mentor group really holds your hand much of the way.

ta

rolf

I'm doing ok at the moment. Average 10 settled loans a month over last 12 months BUT this has taken many years of hard slog and let's not forget the boom times we are in at the moment.

The thing that really should be considered is how sustainable would the business be in a recession? If lenders decide to pull back on lending in general?? This keeps me up at night.

Knowing what I know now would I still choose this business...yes but it's not easy that's for sure. I think working in the loan market environment would be a good place to start just don't get too cosy.

 

[Aaron_C]

Good work Marty. I think of the same thing too so it's always good to have that contingency in place.

 

[Mick C]

Property investing and having good rental yield is my contingency

That's one of the advantage of being a broker; you get exposed to the property investing side of things and " hopefully" end up with a strong investment portfolio to sustain and make up for the initial drop in income/salary.

 

[Aaron_C]

Property investing and having good rental yield is my contingency

Oh yes of course. Also trail books have seem to have gone up in value recently so all's well that ends well.

 

[miximitosis]

So what is everyone's general consensus:

- 100% commision role under experienced broker at loan market attached to a ray white office
- 3-4 days a week for six months while trying to make a financial transition.

Obviously not ideal being part time, but still possible to make it work?

 

[D.T.]

So what is everyone's general consensus:

- 100% commision role under experienced broker at loan market attached to a ray white office
- 3-4 days a week for six months while trying to make a financial transition.

Obviously not ideal being part time, but still possible to make it work?

100% of your income will be commission, but how much commission will they give you for each loan you write? And are you allowed to seek other business too or is it exclusive to the office?

 

[Aaron_C]

Just work out the numbers to see where it leads and whether it is realistically going to meet your expectations or not.
1a) How many leads from Ray White?
1b) How many of those above leads are good ones that lead to a conversion?
1c) How much % do you have to give away to the agent/aggregator?

Just multiply all those figures together to work out what your expected income is and see if it's worth the jump.

 

[Terry_w]

I would ask them how many houses they sell each month. Then think you could get referred to possibly 30% of those people and then possibly 30% of those may use you.

 

[Rolf Latham]

I would ask them how many houses they sell each month. Then think you could get referred to possibly 30% of those people and then possibly 30% of those may use you.

thats a reasonable approach.

In addition, your new business partner will be able to give you some specific stats on their numbers. Obvioulsy, being new to the industry ( and I assume to a people business?) your conversion rate probably wont be the same as the established broker.

ta
rolf

 

[Aaron_C]

Are all loanmarket brokers associated with a Ray White franchise?

 

[Corey Batt]

From what I understand most of them are.

Looking at their stats they put on their website, if you average their total sales as a group per broker it's circa 9.2m per year per broker, with an average loan size of 206k.

But averages mean nothing, there no doubt would be some star performers affiliated with some high volume offices, and likewise be some low performing brokers/agencies.

Look at what cut Loan Market takes and if you're paying referral fee's to the RW agency. There may not be much pie left for yourself.

 

[Aaron_C]

Ah OK that makes sense. I've never been involved with a franchise model for that reason.

 

[tobe]

THe last time I looked Loan market was trialling a new referral system. Instead of a percentage of settled comm as the referral, they were paying $50 per lead referred.

It seemed to have better results than the previous system which was I think 20% of upfront and trail.

 

[Aaron_C]

20% upfront and trail? How are you supposed to eat?

 

[tobe]

you eat well if the reduced margin results in an increased volume, obviously.

trouble is that comm is paid to the pricipal of the agency, so the agents dont necesarily get all of it, so they refer off to another broker who pays them directly.

 

[Aaron_C]

you eat well if the reduced margin results in an increased volume, obviously.

Of course otherwise you wouldn't bother.

trouble is that comm is paid to the pricipal of the agency, so the agents dont necesarily get all of it, so they refer off to another broker who pays them directly.

Is that in breach of their employment?

 

[tobe]

probably, but then what sort of real estate principal is going to fire their best agent for not referring to the agencies broker? The sales guy is going to have a story about how the broker mucked something up.

Its a fascinating field, referrals.....

 

[miximitosis]

Thanks guys. I really do appreciate everyone's input.

It's sounds like it's not an easy field to do well in but if I can make it work for the first 6-12 months, I'm certain I can do well.

Pretty exciting thinking about helping out people and working in the property industry. Two goals I've had for some time.

 

[Marty McDonald]

probably, but then what sort of real estate principal is going to fire their best agent for not referring to the agencies broker? The sales guy is going to have a story about how the broker mucked something up.

Its a fascinating field, referrals.....

Sure is would not want to be beholden to an agent that's for sure.

I have heard the agents collect all the phone numbers at the opens and the brokers call them all the following week and pay a small fee per successful phone contact or similar. Gets around privacy issue as is the same company. I actually can't believe people would want to divulge their details to a person not so indirectly involved with the vendor but many are happy to.

Another firm near me is tied up with R & W (maybe just Sydney?) and they submitted $100 mil of loans last month apparently...so it definitely can work but not my bag.