Brokers should tell clients “I told you so”

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Here's a story you can share with your clients who only want to talk about rate.

Omer Quenneville loves to tell the story of the two clients who bought identical condos in the same building – and especially loves to remind the client who didn’t listen just how wrong he was.
“Do I love saying ‘I told you so’?  Of course I do!” laughs the Toronto Centum broker, who wants brokers to understand that you will never lose a client if you build a relationship based on education – and not on just rate. “That is the first mistake if you make it all about rate – the client should understand that they are selling their soul if their decision is based on one-tenth of one percent.”
Quenneville’s cautionary tale involves two clients who were interested in condos in the same building – one on the sixth floor and one on the seventh.
“It was three years ago, and they both had me as their agent,” he told “I explained that with a variable mortgage you have more options with only a few basis points difference, and who cares if the rate goes up because there will not be any penalties involved compared to a fixed.
“Well, the one client listened and the other didn’t (both had loans from the same bank). Fast forward to 2013, and they each want out of their mortgages two years early. Well, the client who listened to me only had to pay a small discharge penalty and went on to use his equity to buy two more condos in the U.S. The other,” Quenneville chuckles, “would have ended up paying $13,000 in penalties. So instead he’s had to stick it out for another year and a half in his condo. And yes, I said ‘I told you so!’”
Angela Calla, a broker with Dominion Lending Centres and host of The Mortgage Show, agrees that there will always be clients who want to listen and learn, and those who will always want to go their own way.
“Communication is the most important thing in this business,” says Calla. “When the clients aren’t communicating, you are going to lose them. Some will want to do it themselves, and to those we wish them the best of luck – they will live and learn. Others will do their researching on the web, using rate sites, but will also want to understand the business.”
She, like Quenneville, finds the best broker advocates are those who have been burned by making a bad deal in the past.
“First-time homebuyers are usually fixated on the rate, and it is difficult to explain to them the benefits of variable, fixed and penalties,” she says. “But those who have been burned in the past? They are our best advocates. No one sings our praises louder than the client who has paid out a big penalty to get out of a fixed mortgage early.”
But Calla won’t say “I told you so.”
“Let’s move forward, let’s not make the same mistake again,” is what Calla tells her clients who have been burned in the past. “But not ‘I told you so.’”
Like Calla, Quenneville stresses the need to educate and take the time with clients to explain all the options available, and what is in their best interest; but he does admonish brokers for being too volume-focused.
“If you don’t take the time with a client, if you are more about volume than quality, then you will get burned by that client down the road,” he says. “The volume takes care of itself when you take care of the client.”
  • Adil on 2013-06-07 9:31:30 AM

    I don't think I know Dominion Lending Services ;)

  • Sylvia on 2013-06-07 10:43:09 AM

    This article suggests that Variable = Open and Fixed = Closed. This is mortgage 101 people, having a variable rate mortgage does NOT mean you won't have a penalty!!!

    I hope this is a journalistic error and not one on the part of the broker/agent...

    Just my 2 cents worth...

  • Ian on 2013-06-07 10:43:15 AM

    Mortgage Brokering 01...not even 101...

  • A Broker on 2013-06-07 1:33:58 PM

    The other buyer most likely wanted a fixed with no intention to sell and circumstances arose where they had to. Not told if they simply transferred the mortgage to another property. Very negative and unprofessional comments. Sounds like a couple of brokers who lost clients to banks in the past and still carry a grudge. No wonder people are flocking to rate sites with your attitudes like that.

  • Shayne on 2013-06-07 2:25:02 PM

    There is also a big IRD difference between most of the monolines and TD/Scotia.

    Why do brokers support the banks when the clients may end up getting pillaged with the penalties?

  • Bc broker on 2013-06-07 6:32:58 PM

    All we as good brokers can do is give clients the information they need....then it is up to each clients own circumstances to decide which route to go. The arrogance of the broker by stating "I told you so" is a prime example of what is cheapening our business. If rates had gone up drastically, how would the above mentioned broker like call from the clients gloating. Every one would like to save money but it is the clients that will and should ultimately make a decision on terms once their awesome broker has fully informed them on the possible pros and cons of each type of mortgage.

  • Colin Henderson on 2013-06-09 6:34:03 PM

    This has to be the most unprofessional article ever.

    1) The suggestion that a variable mortgage is 'open' is plain wrong. A 5 year variable mortgage is just as closed as a 5 year fixed, and I find this is one of the most misunderstood mortgage questions. To have a supposed professional further that misconception is unethical. btw if by variable mortgage he meant an 'open' mortgage he should have used those specific words. Otherwise the mass assume a variable mortgage represents a 5 year variable hence the aforementioned confusion amongst many. The devil is in the details with mortgages, and that is what professional brokers bring to the table.

    2) The other suggestion that the best brokers can do is to place customers with a product that has no penalties, versus the alternatives, implies that all customer needs are identical. This is perhaps more unprofessional and misleading than the uninformed commentary noted in point 1).

  • Anthony on 2013-06-10 7:50:46 AM

    Somewhat pompous, isn't he...

    He likes rubbing his clients noses in the crap just because they did not take his advice...?

    Shame that we at times get some twisted gratification when a client does not heed our advice and then pays dearly for it, but to broadcast his delight in their loss on this forum...not cool....good luck when potential clients get a whiff of his contempt...

  • lg on 2013-06-10 7:59:09 PM

    Easy to say variable was a good idea. it was luck. no one anticipated record lows.

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