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October 2017

The Life of an Independent Mortgage Broker

Independent mortgage brokers in Papakura are generally independent because they do not want to be tied to a large company. While they will obviously retain a much higher proportion of the commission for any successful mortgage than would any individuals in the large company, the independent mortgage broker must also spend a large chunk of their day searching for new business.

Generally the large mortgage broking companies have good websites that are highly ranked and basically generate new customers it’s such a level that the mortgage broking company is never short of work. These companies are not nearly as motivated to provide very good service in order to retain customers, because they have so much business coming in through the door that they do not need to worry about this.

There are only a small group of these large companies in New Zealand but because of the way the Google search algorithm works these companies collectively pick up over 95% of all new business that comes in through the Internet.

The independent mortgage brokers in North Shore just simply do not have access to this market because they are not ranked up on page 1 for Google searches, and so they need to Resort to the tried and true methods for picking up new customers, and this can involve a lot of your time and effort. They will need to be continually building and reinforcing their network of contacts, and this will include builders, real estate agents, Surveyors, lawyers and even town planners, all of whom may be in position refer new business to the mortgage brokers,  or to point them to  new potential business.

Independent mortgage brokers also need to make certain that they win repeat business, and that their clients are very happy with their service and pass along their company known to their friends and contacts.

The truth is that independent mortgage brokers rely on their good reputation to drive repeat business and referrals. The sad thing is that the big mortgage broking firms who have a large amount of new business coming in through the adore via their web page every day do not need to deliver such good service simply because you will always be in your business coming in. Even worse, these brokers can afford to reject all new clients that are not absolutely certain to get a mortgage, and so the job they have on behalf of the clients they don’t use is relatively easy and doesn’t take them a lot of extra effort.

Mortgage Broking and the Internet

The Internet is the source of a large volume of new business for those mortgage brokers that are smart enough to understand this and to know how to leverage it. While there is very definitely a sizeable market where good old fashioned practices like referrals and repeat business and good networks are what works best, there is a very large and rapidly growing segment of the market that prefers to do their business over the Internet.

This is true for all countries, and in New Zealand over 9000 google searches take place every month for mortgage brokers Hamilton. Only a few very large companies in New Zealand have been able to take advantage of this, because there is really only one way to take advantage of this source of new business. These companies have successfully managed to rank their websites so that they will be number 1 or 2 or 3 on page 1 of the Google search.

The tragedy for everybody else who does not get to be number 1 or 2 or 3 is that the top companies get to dominate at least 60 perhaps 70% of all the Internet business, and anybody on page 2 or beyond will be sharing only around 5 of all this new business, but with probably 95% of all the mortgage broking companies. It is very much a “winner takes all” market, and only those [companies with the deepest pockets and the smartest Internet and SEO consultants are the successful ones.

In spite of this, the sector is ripe for disruption, simply because SEO is largely an Arms Race, and very smart SEO companies able to rank pretty much any website for the major search terms. The opportunity for these companies is to create a homepage that drives users to fill out a form and submit it, and then get this home page ranked number one or two or three, and then have a number of mortgage brokers as clients who are happy to purchase these leads. Most of the independent mortgage brokers in Waikato in the large centres are very well aware that they are seeing a pitiful fraction of the total business that is being generated over the Internet, and they are only too happy to have someone tap into this massive market on their behalf and feed them quality leads.

Interestingly most of these brokers are also happy to take as many leads as they can get, because what they know full well is that it is very easy for them to scale if they suddenly see their business increasing by a factor of 2 or 4 or more. They also know that the more leads they get the more selective they can be as they can choose only the clients that are most likely to succeed in getting a mortgage, and they can also choose clients who are wanting much larger mortgages and will therefore be generating much larger commissions for the mortgage broker.

Mortgage Broking Under A Labour Government

The New Zealand government changes in September 2017, and this will bring about out significant changes to the housing market. The net effect all the proposed changes should be a lot more new houses being built and a lot more first home buyers getting into their first time.

One of the labour parties key policies this to build around 100,000 new and affordable homes up and down New Zealand  within about 5 years. The problem that the Labour Party sees is that most of the new homes built currently nearly twice the size that was really needed for an affordable first time, and are correspondingly nearly twice the price.  The labour party’s new kiwibuild plan is designed to free up land in the large  sentence and to purchase a very large number of new home builds, that’s encouraging the  the corporate builders of new homes to use much more cost effective manufacturing techniques. Even those who are earning $85k per year are not able to afford a home in much of NZ.

At the moment all new homes have their frames and roofing Trusses pre built offsite, and has anyone who has seen a new house being built, the frame and the roofing trusses can be erected easily by two people in the space of two to three days. However from that point on there is a lot of work required to line the house inside, to install the wall cladding and the roof, and it would install all the plumbing and Electrical Services and then paint and fit and finish house. Even the best mortgage brokers in Hamilton are looking to fix this issue. Modern building techniques used overseas particularly and Sweden and Japan use a large an automated Factory to manufacture the finished house wall panels including all the wiring and plumbing and Insulation. These are simply dropped into place once the concrete floor Pad has been completed, and it has been demonstrated that the entire house can be assembled and be ready for painting.

This can have a huge impact on the cost of a new house and also the time taken to build a house, is all of the complex wall panels both internal and external will be manufactured by a largely automated and robot-equipped  Factory, and the time on site for the very valuable builder is only a couple of days.

The impact of this programmed the housing market and on the mortgage broking sector will be massive, as new houses there are less than half the cost existing you house was will become available for first time buyers on a massive scale, and all these guys will need a good sound mortgage. This will be the type of Environment that mortgage brokers in Waikato flourish in,  and it should mean that the mortgage broking sector is very healthy for the next 5 to 10 years.