Building a great brokerage business, or any business for that matter starts one client at a time. We look at how client relationships can help drive your business into the future, whatever the market conditions are.

By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

For those of you who keep up to date with my blogs, you will know I read Australian Broker regularly.  An article struck a chord with me the other day, but it wasn’t until this morning that I realised why. I read Ben Abbott’s story Commissions to shrink as clients buy and hold on Friday, and my initial thought was “Oh no, not more reasons why brokers will lose clients.”

The story features figures from RP Data showing housing hold periods have stretched out to 9 years for homes, 7.7 years for unit, and that the figures will still increase in 2012.

Here is a short excerpt from that story:

RP Data said that this inclination from buyers

[to hold onto property] would only increase over time, and this would impact mortgage brokers who relied on transactional commission income to make a living.

“The average hold period is likely to continue to increase over the coming years as private sector demand for credit growth remains below historic levels and sales volumes remain below their peaks,” research analyst Cameron Kusher said…

“It appears that home owners are increasingly likely to keep their current properties rather than upgrade due to the significant cost,” Kusher said.

RP Data suggested that increases in median home values over the period, leading to declines in affordability, were having a marked impact on the period clients held on to their assets.

What interested me as much as the article, were the comments from brokers about it. Most were surprised that some brokers would rely on refinancing for income.

Rather than see home owners holding onto property as a negative, those that commented saw it as a positive. Here was one such comment:

“So what is the problem – your trail just keeps on growing! this will not mean a reduced focus on your clients. It gives you greater opportunity to build a lasting relationship with them…”

It got me to thinking that there must be two different types of brokers in this market – those that are lucky enough to have built relationships with their clients over time and that will stand the test of time whatever regulations, whatever market conditions are put upon them, and those that are forced to live “hand to mouth” putting deal after deal together the best way they can and just crossing fingers that some of them fall the right way whilst every outside force seems to be trying to shut them down.

So how do you revamp your business attitude to adopt the first policy in order to weather the storm? It starts with doing the right thing for each client. Then it means actually pointing out what you are doing so they are aware of it. Showing them where they are saving money, where they could go wrong, so they appreciate the extra effort you have gone to, to fit them into the deal that’s right for them.

I made the connection to credit repair today, thinking about all of those brokers who don’t consider it a valuable resource for bad credit clients.

I realised why – that some brokers can be stuck in that ‘now’ thinking – just concentrating on getting the deals over the line, compared with those who are willing to try every avenue to make clients for life.

The fact is, many clients have bad credit history, but are entirely suitable to service a loan. So they are put into a non-conforming loan, which they can refinance on at a later date. But is this long term the best decision for every client?

Many would benefit from at least assessing whether they would be suitable to repair their bad credit rating, prior to going into a non-conforming loan. Admittedly, credit repair is not suitable for every client. But the number of rampant mistakes and errors in credit reporting in Australia* would mean it warrants an initial assessment of their suitability. And so does the average saving you could make your clients.

Here’s how you can show the client their saving…

On an average $300,000 loan, at an interest rate of say 9% compared with a standard variable rate of say 7% they will pay $15,046.57 more in interest just over the first three years of the loan by entering into a non-conforming loan at this interest rate. If you jump on our website to the MyCRA Credit Repair Calculator, you can punch in the real interest variables and actual figures you have for their circumstances and show them how much they can actually save based on the cost of credit repair.

And remember, creditors make mistakes all the time, and the onus is on the consumer to correct those errors – but most people don’t know how and when they attempt it, they get nowhere. The next time you hear a story about someone’s Telco issues or mix-ups, or any kind of error that finds your client locked out of credit – don’t tune out and send them on their way, or label them a non-conforming loan candidate straight away. Before you do that, do them a favour and send them to us to find out whether we can fix their bad credit for good. We have a previous track record of up to 91.7% success for every case we take on.

Once we’ve cleared their bad credit we can send them back to you to get into a home loan they will likely stick with for 9 years. You pick up the trail, and your future is looking more secure every day.

* The volume of credit file errors on Australian credit files is uncertain. A Veda Advantage spokesperson estimated 1% of the 250,000 credit reports they give out as a credit reporting agency to Australians every year contain a material error on the credit file. But the Australian Consumer Association (now Choice) survey from 2004 revealed that 34% of the credit files surveyed in their small scale study contained errors or inconsistencies.

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