Leading brokers discussed MortgagBrokerNews.ca’s latest Big Story at their weekly Canadian Mortgage Hangout and opinions diverged when it comes to loyalty agreements; an issue moderator Jackson Middleton considered “contentious… with a lot of different opinions”.
“In one sense it can be used to shake the leaves from the tree at the absolute beginning of a file; this form wouldn’t be busted out as soon as people come in the door,” said Rob Campbell of Verico the Mortgage Wellness Group. “You’re obviously going to do your due diligence to talk with the client and to see if you can help them or you’re willing to help them.”
For Campbell such agreements are a good litmus test for determining the seriousness of a potential buyer and ensuring they are doing business in an efficient manner. And many brokers agree.
“I’m kind of leaning towards getting one in place; not that I’m losing deals because of it – there has been times I have – but it’s maybe something I want to get in place off the get-go so there’s maybe a bit more loyalty for people that maybe are shopping around a bit more,” Scott Dawson of Verico Paragon Pacific Mortgages. “I don’t want to waste my time on a file that I’m not going to close at the end of the day. If it’s coming from a referral, I don’t want to waste their time either.”
However, on the other side of the debate sat Nick Bachusky of Mortgage in Ottawa.
“Personally for clients in just regular, residential homes, I would never think of doing such an agreement; I do not really welcome it into the mortgage broker side,” Bachusky said. “For commercial deals, over $1 million, I have done them in the past. But that’s based on the amount of work you’re putting in – countless hours.”
The weekly Canadian Mortgage Hangout is a place for leading brokers to discuss the issues of the day. Episodes air every Thursday at 10am PST