Broker website ditches rates

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It may be the ultimate in putting your money where your mouth is: A Vancouver broker has removed any and all rate charts from his website – a lead few of his peers, despite talk about broker value propositions, have followed.

“I believe it would help to move the industry beyond rate,” Scott Dawson, a mortgage broker with Verico Paragon Pacific Mortgages, told MortgageBrokerNews.ca. “I removed rates from my site two years ago, and it has probably lowered the number of leads I get, but improved the quality of those leads.”

It’s also done away with the hassle – what Dawson prefers to call the “distraction” – of hunting down and updating rate information, increasingly used by most brokers to lure to Internet shoppers. Ultimately, that’s not a game most brokers can win, said the Burnaby broker.

“Marketing on rate attracts clientele who are just interested in rate, not really your services as a broker,” said Dawson. “Rate shoppers can be a waste of time and by shifting my sites’ focus away from rates and to focus on the value I bring to clients, that has saved my time for clients who want that service.”

Dawson, in fact, uses his site as a complement to other, primary marketing efforts. Regular video blogs and a thorough analysis of mortgage terms have helped to better position him as a mortgage expert in the minds of prospective clients, he said.

The majority of brokers appear to be moving in the opposite direction, hoping to capitalize on the growing number of homebuyers using the web to shop rate.

A growing number of brokers are actively relying on online referral website, specifically focused on rate and often requiring mortgage professionals to buy down rate in order to convert those leads.

“At the end of the day, I found that I got the lead if my rate on that product was the lowest on the (referral site) that day,” Paul Poirier, a top -20 broker with Dominion Lending Centres based in Toronto, told MortgageBrokerNews.ca.

The broker with DLC - Eagle Group uses one of several sites focused on generating “quality leads” for mortgage-broker clients by offering Internet users a daily comparison of their clients’ rates and then linking them to an individual broker’s website. Fees are entirely based on leads and not just the number of clicks to the client’s landing page.  
 

  • Mystified on 2011-11-04 9:46:59 AM

    Just wanted to throw this out there to see if I'm alone in my assessment:

    Under MBLAA, are rate aggregators like RateHub.ca not completely illegal? Is FSCO completely asleep at the wheel by not actively pursuing these websites operating in plain view? I know there are exemptions for consumer reporting agencies to be unlicensed, but I'm assuming these sites would not qualify as such (given their revenue is derived from lead generation).

    Moving forward, this should be a MAJOR focus of CAAMP and IMBA - Their constituents are being chiseled by a growing industry not subject to the same laws, accountability, scrutiny and costs that brokers are.

    Many licensed brokers and agents are commodifying our industry on their own without these unlicensed parties dragging us to the bottom.

    Comments welcome.

  • Chris / Winnipeg on 2011-11-05 3:34:03 AM

    Never sell a mortgage on rate because someone else can always beat you. Show value in what you can do for your client.

  • OntarioBroker on 2011-11-05 3:43:47 AM

    I submitted a complaint to FSCO last year about a similar mortgage comparison website run by a marketing firm - they were not licensed and asked a number of questions including credit and employment status and req'd mortgage amount - ie. more info than allowed under the definition of 'simple referral'; Here is the response I received from FSCO:

    "...based on information received, I found (name of site) provides an online service for mortgage rate comparisons, similar to the service it offers for insurance product, and states that the rates are estimates only and provided solely for the mean of comparison. The site no longer includes an application to be completed for referral to a mortgage agent or broker. The mortgage rates offered for comparison appear to be from financial institutions that are exempt under the Mortgage Brokerages, Lenders and Administrators Act."

    I believe these sites are commodifying our industry as they encourage the 'rate-shopper' focus when there is so much more to choosing the most 'suitable' mortgage product. However,these sites have clearly identified the fine line in the legislation...and seem to be here to stay.

    As concerned industry members, our messaging to consumers needs to continually emphasize the fact there are many terms/conditions that impact the potential cost and ultimate suitability of a mortgage - rate being only one of many. Ironically it is often FLEXIBILITY that is built into a mortgage product that makes it ultimately cheaper; however the average consumer has a hard time seeing past a simple rate comparison (easy enough to do) vs making a choice of a slightly higher rate but which allows flexibility to accomodate perhaps unforeseen future circumstances. Being unable to quantify an immediate advantage in terms of dollars and cents, the true choice is just not that easy to see for some! As an industry we have a lot of consumer educating to do!!!

  • Julia Krause on 2011-11-05 3:54:51 AM

    Way to go, Scott Dawson! Great idea. Wishing you continued success in the business! :)

  • @kiltedbroker on 2011-11-05 4:43:25 AM

    Wow, that is such a bold move - I absolutely love it! Well done.

  • Ron Butler on 2011-11-05 4:59:25 AM

    I guess the sign of great sales people is that they can actually sell themselves on their own foolishness.

    We must have a ton of great sales people in this business because all I ever hear from other mortgage brokers is that rate is unimportant and yet when I ask the same broker about their own mortgages they launch into a story about how they searched and negotiated and fought and got a fantastic rate.

    The three biggest search areas for Google in North America are Insurance, Loans and Mortgage, these represent about 35% of all searches. After that the next biggest segment is about 2%. People seem to be interested in getting better deals on financial services they need.

    Don't get me wrong, if selling service works better for a broker than selling rate, that's great, but please, trying to say rates are not important is just plain silly.

  • Mortgage_Master on 2011-11-05 6:06:07 AM

    We have never advertised mortgage interest rates, on our website, and have no intentions of starting. I agree with Scott Dawson, rate shoppers are only interested in the lowest number and not in the best mortgage suited to their needs. We may loose out on some quality business but we do not waste 90% of our time updating a website and answering rate inquires that are only interested in the lowest number. It simply works for us and may not work for other mortgage professionals. Developing and maintaining a professional reputation sure has worked for us.

  • Jeremy on 2011-11-05 8:03:36 AM

    I commend those who sell value and service over price-keep up the great work! Our industry needs more of like you!!

    If we made our decisions based on price as some have suggested, then we all must be driving Ford Fiestas or something comparable, right? Price is an issue in the absence of value!! Think about it, it's really not that difficult.

    Not only does my office not post rates on our website, we also do not send out rate sheets to realtors. Why...because you do and there is nothing compelling about a boring old rate sheet. Add value! Lets not kid ourselves here, we ALL have the ability to buy rates down!


  • Tom on 2011-11-05 7:01:36 PM

    Obviously offering value and service is important. Like Ron said though, rates are very important. When a client puts their trust in a broker I find it a tad arrogant and self serving when the broker charges them a higher rate. When they can go as low as say 3.39% but they actually use the celing rate of 3.59% so they can pocket the difference and give a more favoured client a better bought down rate.

    Is that what is considered superior service ?

  • Ontario Broker on 2011-11-12 3:27:34 AM

    All good arguments but honestly if the Brokerage Community only controls 25% of the market that means 75% of the consumers are being duped by the Banks that rates of 4.29 to 5.29 are the best out there and without some kind of comparison those same midnight surfers consumers will never know they could get a rate today of as low as 3.14 for five years. If they are out there shopping on line I would like to think if they see my rate is lower I will at least get the opportunity of talking to them.

  • Rick on 2011-11-12 5:41:46 AM

    Here is verbage I use my own web site,instead of showing rates
    Mortgage rates are in a constant state of flux. Rates that you may see on various web sites could very well be out of date by the time you apply for your mortgage. In many cases these websites do not differentiate on the rates for clients with specific needs or credit issues. It is impossible for you, looking at different sites to be sure that the advertised rate is what you will end up with.

    One thing that you must be very cognizant of is that some mortgages with very low rates may not come with the options or flexibility that you require. The only way that we can accurately quote you an interest rate is to discuss with you your particular situation. Everyone's needs and goals are different. Once we are aware and know precisely what is right for you we will find you the best available mortgage product/

    Do not forget! Not all mortgages are equal. Is it the best rate or the best rate available for you? Many sites advertise "Today's Best Rate". We do not wish to mislead anyone.

    Contact us directly either via email or phone for an honest, professional discussion of your mortgage requests.

Broker news forum is the place for positive industry interaction and welcomes your professional and informed opinion.

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