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Mortgage Broker News | 06 Jul 2011, 10:10 AM Agree 0
Brokers looking to generate leads from the Internet may ultimately find it easier and, indeed, cheaper to hand the job to one of a growing number of online referral agents, suggest brokers now winning as much as a 50-percent conversion rate. Still, even then, success largely depends on one thing: rate.
  • @kiltedbroker | 07 Jul 2011, 01:35 AM Agree 0
    I think this kind of lead generation misses the mark entirely, as well as Google ad words or any other type of online billboarding for that matter. You cannot build a sustainable business with clients who are "no less inclined to refer a broker to friends or family if they're satisfied with the service."

    Rate shoppers are not loyal and are never satisfied, period. We have all dealt with them and know this to be true. Why take less commission to buy a client who will most likely just leave you and rate shop upon renewal anyway? This makes no sense, it cheapens our industry and turns the competition on ourselves instead of trying to focus on taking the banks market share.

    Clients that come in through the rate shopping door will leave through the rate shopping door. With this type of lead generation the best you can hope for is that at least you get paid a reduced commission on 1 deal before they split.

    Not for me, Thanks!
  • Marc | 07 Jul 2011, 01:37 AM Agree 0
    These lead generating sites are nothing more than pimps, and all the discount brokers who offer their mortgages on these sites are the prostitutes. The lead generating sites are the ones who make all the money sending these leads to brokers who banks 20bps or less on the deals trying to match and beat themselves. Good luck!!!!
  • Steve Holman | 07 Jul 2011, 01:49 AM Agree 0
    Rate Hub is a very nice site, seems to work well. I think that they perform regulated activities, do they have any FSCO licencing issues ?
  • Ron Butler | 07 Jul 2011, 01:52 AM Agree 0
    Thanks to Marc for his intelligent, moderate comments. "Pimps and Prostitutes" very classy. The question of commission reduction in exchange for better rates is always the number one subject to a create wild arguement in the broker community. I think we all need to settle down and have a calm discussion on this issue. The internet will continue to drive rate information at the consumer and mortgage brokers need to address the subject. But insulting each other is not the way to approach this.
  • David Larock | 07 Jul 2011, 02:01 AM Agree 0
    There are two reasons I won’t consider partnering with lead gen sites:

    1. For brokers to achieve success with this model they need to buy down their rates and then pay a fee to the lead gen site on top. If you're willing to cut your commission that much why not just work for a bank? They'll give you more leads, you won’t be servicing rate shoppers all day and you'll probably make more money.

    2. If lead gen sites take off, they will hold the power in the relationship and that gives them leverage to take a bigger cut of your commission down the road. Essentially, you are helping to build a competitor that, if successful, will probably eat you one day.

    Nothing against the hard working folks who are building these sites. I just don't like the model for independent brokers. If you want long-term success, get with the 21st century - build a kick-ass website and generate your own online leads!
  • Alyssa RIchard - RateHub Founder | 07 Jul 2011, 02:13 AM Agree 0
    Thanks for the compliment Steve.

    I do agree that competing on rates is not a strategy for every broker, however it works very effectively for our clients.

    We are also launching broker profiles and listings in provinces for brokers who wish to bring their businesses to life and generate leads through positive referrals. You can see a sample profile here:
    http://www.ratehub.ca/mortgage-broker-safebridge/verico/drew-donaldson

    In terms of regulations, we are allowed to generate simple leads - name, phone number etc, and are also licensed as a lead provider in BC.

    If you have any more questions please feel free to contact us directly at 1-800-679-9622.
  • Morgan | 07 Jul 2011, 02:17 AM Agree 0
    As a new broker, I think these sites are an important tool to help me getting new business. Probably way more effective than advertising at a local newspaper.
    However, will the clients I'll get calls from be a waste of my time? Do they qualify for the rates I'm advertising? Probably not...And how much of my commission will these sites take? Or for how much are these leads sold? Has anyone worked with them to share the experience? I've seen sites that offer leads for 100 bucks which I find outrageous...
  • Experienced broker | 07 Jul 2011, 02:31 AM Agree 0
    I tried Ratesupermarket and it was a complete rip off. The leads were horrible, excessively over priced and I lost thousands in a very short period of time. Please be extra cautious when dealing with this type of company. I have not tried Ratehub yet and likely won't after such a bad experience.

    The concept is interesting but needs restructuring and a reduction in cost.

    Cheers.
  • Greg Williamson - Founder 180DegreesAcademy.com | 07 Jul 2011, 04:01 AM Agree 0
    I have recently been leading our community to re-frame our thinking on internet lead generation. saying "Internet lead generation is only about rates" may be re-framed to "according to many surveys well over 80% or more of people start their mortgage search on the internet" The point I think is that internet lead generation may be all about rate because that is all that is out there. It is not just the lead gen. sites but many individual broker sites that push "I have the lowest rates" on-line. There is a better way. Give the internet searcher something of value and they will connect with you.
  • Toronto Broker | 07 Jul 2011, 04:02 AM Agree 0
    It's unfortunate that brokers are destroying their business by buying down rates. It's not a sustainable business model. Look at real estate agents, how many successful ones do you know that acquire business by offering the lowest commission? Brokers need to learn quickly, rate is important but it's not the only thing, otherwise brokers market share will decline in the near future through fierce bank competition and brokers undercutting each other.
  • Wane Davis | 07 Jul 2011, 04:43 AM Agree 0
    I agree with Greg and TO Broker. Live by the sword die by the sword...rate as a single value proposition is a fools game...and the banks have a bigger sword. Compete for customers by offering MORE!
  • Jeremy | 07 Jul 2011, 04:58 AM Agree 0
    This whole online discount rate stuff doesn't sit well with me because lets be honest, there is a lot of "bait and switch" going on here. You can't build a sustainable business this way, period!
  • Marc | 07 Jul 2011, 02:58 PM Agree 0
    I know that how I came across to start this discussion was not politically correct in some peoples’ opinion, but everyone's comments (with the exception of the total sales pitch served by the subject of the article, a.k.a. - the lead pimp) seem to be right in line with what I said. The sad part is that the lead generation sites apply the same techniques in targeting the client weather they are trying to sell mortgages or bathroom supplies. Everyone who is familiar with this space knows that the best leads are generated when you truly understand your customer and what your customers are looking for. You can only optimize your campaigns once you have yourself generated the leads, spoken to the clients themselves, and are knowledgeable in the mortgage field. Then you begin to understand how far your leads go, which content produces an attractive RIO and which doesn’t. Bottom line, these sites are a waste of money, they breed the bottom feeders, and destroy broker integrity.
  • Ron Butler | 08 Jul 2011, 02:56 AM Agree 0
    I am firm in my position that calling a hard working professional internet marketer "the lead pimp" is something that should not be allowed on this discussion board. I find it odd that those of us who believe that internet rate marketing has a present and a future in this business are submitted to such scathing attacks on this type of forum. I have tremendous respect for Greg and and the other brokers who have posted informed comments. They are 100% entitled to their opinions and they represent a segment of our business that will always florish. Providing high value to the client and avoiding price sensitivity is a winning proposition. What does not make sense to me is attacking anyone with a different idea. There are many very successful brokers who have built very strong business models based on rate comparison, saleried agents, strong retail locations and advertising. True North is a great example. There are so many ways to be successful in this business as long as the system used is ethical and benefits the public; why attack it?
  • Robert Stanfield | 08 Jul 2011, 04:24 AM Agree 0
    It is amazing how many phonecalls I recieve each week from these referral generating sites. I want nothing to do with these sites or clients that only look at rate. But as our industry goes, it amazing how much everyone preaches we should be more about service and knowledge than just rates, and as soon as they get referrals for free or from a site like this, they sell out. We can only make ourselves look as professional as we act. Belong to these referal sites and paying for referrals is not professional. I ask every company that calls me, where did you get my contact info? A few of them have said the CAAMP membership list.
    Just another reason why I feel CAAMP is about nothing but making money and an organization we should be done with.
  • TorontoBDM | 08 Jul 2011, 05:07 AM Agree 0
    The way I see it, every broker/agent has the right to generate business leads in whatever fashion works for them. Certainly, there are successful high-volume producing houses that have attained the highest status level with their lender partners and are able to confidently buy down rates to edge out the competition (and still manage to keep the lights on). Good for them! It's simple. If the internet lead generators are still in business, then I suppose there is a need for their services.
    Granted, not everyone is able to play the "lowest rate" game. Those brokers (and lenders for that matter), need to find an alternate value proposition for their clients. Rate shoppers will always be rate shoppers. You see them coming, don't you? They are just looking for someone to handle their transaction at the lowest rate. For other clients, their mortgage is more than just a "transaction", and that's where brokers can make a connection with a client (and the many referrals that follow) that will beat out rate just about every time.
  • Toronto Broker | 10 Jul 2011, 12:21 AM Agree 0
    Great question Steve, shouldn't organization/people dealing with mortgages be licensed by FSCO? FSCO/ CAAMP need to look into this, otherwise what's the point of being licensed?
  • Elfie Hayes | 22 Jul 2011, 03:42 AM Agree 0
    I have read all the comments and I would like to add my 2 cents worth to the discussion. Last year my office generated a huge chunk of our business from the web without using a single lead generation company. We have a real marketing strategy in place using a company that understands how to build a complete presence on the web. I had them build 2 web sites, one for good credit, one for bruised credit. We have all the usual Social Media presence. Facebook, Linked-in, Twitter and now Google places. We had 2 mobile sites built to compliment our websites for our Smart phone user clients and we blog. We are also on every free directory that I can find and a few that we pay a small fee for. I spend a good deal on marketing but I have great ROI and we don't sell on rate!!! We sell on being customer friendly, having excellent rates and the most amazing follow-up of any local mortgage agent. So think about building your own lead generation tools with the help of the web (most of it is free anyway) and you can portray yourself as a professional not just a rate cutting machine!! I wish you all great success.
  • PALI SINGH TEGGARH | 09 Jun 2015, 06:19 PM Agree 0
    I believe the back bone of the mortgage funding companies are mortgage brokers and even for larger mortgage brokerages. Let's come up with idea of cooperative brokerage and brokers.Where none should be a boss and none should be greedy on commission if you want to survive as a license holder. There is no such a model in the industry where we can survive like a job. Every broker working in other field beside the mortgage business. and getting stretch out themselves. if you will compete to each other then who will compete to the Banks ? MBO Mortgage Brokers office Inc.
  • Sophia Rose | 04 Sep 2015, 12:47 AM Agree 0
    Mortgage leads are so expensive that I was breaking even at best usually. The difference maker for me was starting to use Zuumlead technology I’m getting about 400% more conversion rate now. 
  • randy | 18 Apr 2016, 05:31 AM Agree 0
    It’s hard to find a decent company to buy leads from. Seems like a fairly crooked business so any advantage you can find you need to use. The best thing I’ve found as far as advantage is a service called Zuumlead that instantly converts my incoming email lead that I have to be watching for into the customer just being on my phone. It’s fast and saves me the constant stress of needing to watch over my email constantly. 
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