Brokers are already fearing the loss of “client ownership” with the launch of a new website by the people behind RateHub.ca – specifically a web portal helping calculate and arrange the closing services of lawyers and appraisers.
“MyClosingCosts.ca,” is designed as a first-stop, one-stop shopping site for those who have already secured a broker and/or lender, and are now looking for the best price on lawyers and appraisers.
But for mortgage brokers, the new website is potentially another tool that could erode client loyalty, much as rate sites have already been accused of in the past.
“If I just pass along clients to a website, I lose the value of a relationship,” says Patrick Smith, a mortgage agent with Dominion Lending Centres Altra in Toronto. “I am fairly new to the industry, so I don’t have those relationships established yet.”
RateHub.ca founder Alyssa Richard wants to reassure brokers that MyClosingCosts.ca has been specifically designed to not refer or link those using the site to RateHub.ca.
“We kept mortgages out of it purposefully so mortgage brokers could use it without fearing that they will lose clients,” says Richard. “We respect the fact that they don’t want to send them to RateHub. We’ve had the site up and running for about a month now, and the brokers and real estate agents who have been using it love it.”
For Smith, he can appreciate the value of a website that provides real-time costs from lawyers and appraisers operating in the area.
“The value (of MyClosingCosts.ca) is tremendously obvious,” Smith told MortgageBrokerNews.ca, “and credible information is always valuable. Having those calculations available without having to think about it would be great.”
Andrew Lee, a broker with True North Mortgage for the last two years, has been using MyClosingCosts.ca and can only find an upside to what the website has to offer his clients.
“I’ve referred a few clients already, and so far so good,” says Lee, whose background includes 10 years in the industry on the lending side. “I think this is more of a benefit to brokers.”
Lee – who has also been using RateHub.ca for over a year now – finds that today’s customer is going to the web first for information.
“Maybe the older generation – 50 and above – are a bit wary of using these sites, but I’m the type of person who does a lot of research online,” he says, “and consumers are too, comparing different quotes and services before even picking up a phone.”
Closing costs can range from 1.5 to 4 per cent of the purchase price of a home, and for many homeowners, the extra fees can come as an unexpected an unwelcome surprise.
“We provide quotes from home inspectors and real estate lawyers in the area, so you can find the best prices with local service providers,” says Richard. “Once the client has found a home inspector and real estate lawyer, request a call-back, or visit their site for more information.”
The online calculator will summarize the cost of a client’s property, and then the client can download a PDF of the report, she adds.
“It is an apples-to-apples comparison on costs,” says Richard, “which is so important for the client.”
Smith does wonder how the fee structure from some lawyers would be affected if the leads are rotated around a pool of available professionals.
“Some lawyers have a certain fee up to a certain amount of disbursements,” he says. “If this site generates the lowest fee available, like RateHub, then I would wonder how that fee structure would be affected.”
Richard says that those quotas from lawyers have already been factored in.
“We force them (lawyers) to in some cases quote a flat fee,” she says. “We had one client tell us on Facebook about a $120 administration fee for another paper clip and two staples. We tell the lawyers – and appraisers – to factor in an average and to charge that amount for everyone.”