Internet-savvy consumers question need for brokers

Internet-savvy consumers question need for brokers

Internet-savvy consumers question need for brokers

A growing number of homebuyers say they simply don’t need the advice of a broker, according to a new survey, suggesting those cock-sure consumers are prepared to go it alone with help from the Internet.

“Brokers are often being left out of the process, either by proactive lenders or because customers do not see them as adding the right level of value,” reads CAAMP’s Consumer Mindset report, part of its 2013 Spring Survey. The polling of more than a 1,000 respondents asked homeowners who'd used a broker in the past why they would not in the future.

Some 41 per cent of those respondents indicated that they “Did not need the advice” of a broker – that’s up from the 24 per cent who answered the same way last fall. Perhaps of even more concern were the number who doubted whether a mortgage broker could in fact get them a better deal. That percentage came in at 28 per cent for the spring survey, up from 11 per cent in late 2012.

Both trends, says one broker, reflect on the growing comfort level consumers have in relying on Internet research – including rate sites – to ferret out the best deal for themselves.

The results also suggests that brokers will increasingly have to up their value add for clients or simply increase their originations volume to compensate for any growth in the number of buydowns.

Either way, the Web may be rapidly changing the way consumers perceive the complexity of the mortgage transaction and the need for expert advice.
 

6 Comments
  • John 2013-05-30 10:02:06 AM
    People think they don't need an accountant or a lawyer for transactions as well and learn the hard way. It's pretty much the same. Whether they THINK they need a broker or not is the issue. Why not use a broker and have an expert looking after your file when it's FREE! My survey conducted over the last 25 years in the business is that most people just aren't too bright when it comes to common sense decisions.
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  • Kent Farnsworth, Meridian Simply Mortgages 2013-05-30 10:49:03 AM
    I don't think that we're in any imminent threat from website rate searching. There is the odd person that will choose to go it alone if they are confident in their knowledge, but then again, I find that this type of person is most likely the one that will shop the heck out of you anyway. Personally I'm fine going without that guy. I refuse to play the back and forth rate game, and it is very rare that one I have given them a rate they will attempt to shop me.
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  • Brian Matthey 2013-05-30 10:58:07 AM
    John I agree.it is unfortunate that rates sites are commoditizing mortgages when they are the single biggest loan that a client is ever likely to make.Many people relate to a mortgage as rate only in the ultimate saving.
    BMO's discount efforts last year highlighted the pitfalls of a discounted rate offerring with future mortgage contract conditions that could impact the borrower's ability to control their future.
    Any mortgage professional who is independent from the influence of one lending source and whose main concern is their client is in the position to ensure their client's interest is being served now and in the future.They are also in a position to guide their client's future with specific repayment strategies that will only improve that client's overall financial position.
    I too have been in the business 25 years and I rarely encounter a client who has the necessary background in mortgage planning or knowledge of the mortgage market to make a well planned and informed decision on their mortgage choice.I have met many who have made the wrong decision or choice in their first time buying decision and realized only later the implications of that choice.
    We have to do a better job educating the public.

    This is a little different than the changes taking place in the real estate industry, but also bears some similarity.The Buyer or seller thinks they can navigate the system themselves and save a lot of money in the process.The mortgage shopper thinks they can navigate the rate market to do the same.In the case of the mortgage broker,there is no up front cost to a qualified buyer.The actual cost,though, to the mortgage shopper may be the time they take to investigate their perceived best deal while not knowing the future implications of their decision on the biggest loan they are ever likely to make.
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