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The “Best” Mortgage Brokers…

Mortgage-BrokerThere’s been a debate underway in Saturday’s thread about what characteristics comprise the “best” mortgage brokers.

Someone said that the best brokers were not salespeople, but educators. That was shot down by another, more cynical reader who felt commissions are our master.

For what it’s worth, here’s our take on the whole thing…

The reality: Brokers are not created equal.

To say that we are is like saying lawyers never overbill or mechanics never fix things that aren’t broken. There are thousands of mechanics, lawyers and brokers that are good people and put their clients first. It’s those bad weeds that spoil the garden.

Despite that, the fact remains that the best brokers make their interests subordinate to their clients. (Note, that “best” as used here, doesn’t refer to simply the highest volume brokers.)

“Best” refers to the brokers most capable of delivering:

a) the lowest overall borrowing cost (not just the lowest rate), and/or

b) the most satisfying mortgage experience.

Consumers are not all the same. Far from it. Some folks value things like time savings, certainty of closing, long-term debt-reduction/wealth-building strategies, credibility, and hand-holding throughout the process. Others would rather climb Everest to shave 10 basis points off their rate. God bless them all.

Per above, we can’t speak for all mortgage advisers, but we know one thing: the best ones never recommend inferior mortgages because they pay more. There are at least three reasons for that:

First, many mortgage professionals prefer to earn an honest living. That tends to make it easier to get out of bed in the morning. That’s why the best brokers quote the lowest rate they have available, right out of the gate. Some, albeit the minority, even refer clients to RBC, BMO, and HSBC when that best serves the homeowner—even though those lenders only pay commission to their bank employees.

Secondly, doing the right thing makes good business sense. People can detect from a mile away when someone is “selling” them versus “helping” them. It’s therefore much easier to meet a client’s “smell test” if you, the broker, would choose your own recommended mortgage plan for yourself, were you in the borrower’s shoes. Otherwise, you do things (often subconsciously) to sabotage your client relationships.

Lastly, it can never be overstressed that brokers live off of referrals. The fact is, people don’t refer business to those they don’t like, respect and trust. Making it long-term in this biz means exceeding expectations in those three areas. That and adding uncommon value are what define the “best” of the best brokers.

Rob McLister, CMT