The nation’s capital cities have stolen the spotlight for far too long. Some of the nation’s best regional mortgage brokers share their stories and divulge the unique opportunities and challenges that exist outside of the concrete jungle.
Based a mere 25 minute drive inland from the Gold Coast’s Surfers Paradise, the market John Kennedy services as a mortgage broker could be considered halfway between a regional area and a populous urban pocket, placing him in an ideal geographical position. No matter what their location, though, he believes the most valuable thing for a client is the same: relationships.
“I think clients value the personal relationship most highly. They appreciate dealing with the same person year after year and not having to explain their circumstances over and over to a new 'personal banker'. This relationship fosters loyalty which leads to referrals and repeat business,” he says.
Like all businesses that rely on the customer, building trust is crucial, and Kennedy believes the local community feel in Mudgeeraba helps to foster this sense of trust.
“The local community is very important and the best way to build trust is longevity and good client experiences. People notice when you've been around for a while and it always amazes me how far word of mouth spreads.”
Kennedy has been acutely aware of the importance of relationship building from the beginning, and not only with clients, but also with other businesses in the area that offer services he doesn’t. In this way he has solidified a number of partnerships that facilitate cross-referrals, which works brilliantly for his business.
“Most of my business comes from repeat clients and client referrals. I also have a shopfront in a busy local shopping centre where I have been for almost 10 years so a lot of people know where I am. And over the years I've built some great relationships with local agents and solicitors,” he says.
As for getting your foot in the door as a new regional broker, he believes that going to your existing network of friends, family and work colleagues is the best strategy.
“Then as you start to build your client base try and grow your network of agents, solicitors etc. The most important one though is the way you service your clients - word of mouth and client referrals are a great source of business as you grow your book.”
But Kennedy wasn’t always in the mortgage industry. He started his “second life” as a broker 14 years ago when he was working as an accountant and was after a change.
“A work colleague of mine referred me to a Mortgage Choice broker when I was looking at purchasing an investment property and I thought the concept was brilliant. I made further enquiries into mortgage broking and got to the point where I had to give it a go and I haven't looked back.”
For Anthony Clough, being based in Horsham in Victoria has given him ample opportunities as a mortgage broker. With the town’s huge construction growth, he has been able to leverage this and offer his customers a greater variety of lenders to choose from. But like many, he wasn’t always a mortgage broker and began his finance career working in banking.
“After working in the CBA as assistant manager and Bank of Melbourne as manager I wanted to be able to provide more options for people in regional areas,” he says.
He adds that he likes the idea of being able to build a business based on solid relationships, and working in a regional area is the ideal environment to facilitate this given that his business is built entirely on referrals from friends and family.
According to Clough, client retention and loyalty is simply a by-product of doing good work and getting your clients results, so if you’re a regional broker and you’re good at your job, holding onto clients and getting referrals will come naturally.
“Often after [clients] were declined form their bank we were able to help them out and get them a loan,” he says. “Delivering results and therefore having a good reputation helps to drive business and referrals.”
The social aspect of working in Mudgeeraba is a highlight of being a regional broker, according to Clough.
“We love that when we are socialising in the community … we run into clients all the time and that gives us a great chance to network,” he says.
Working outside of business hours is also a way that helps to instil trust in his customers, and show his understanding of and dedication to each individual’s situation.
“We also see the majority of our clients outside of normal business hours, which means we can get in front of more customers and help more people. Most people work 9-5 and we are only too happy to see people after work.”
Surprisingly, though, Clough describes the biggest challenge he faces working in a regional area is the lack of awareness of the role of a mortgage broker.
“The biggest challenge for us is people understanding what a Mortgage Broker actually does and that we don’t charge for our services.”
As a final piece of advice, Clough’s motto is simple.
“Be brilliant at your job,” he says. “Always deliver above a customer’s expectations of you. Realise that you can’t build a business working the normal 38 hour week, you have to work hard.”
On Trac Mortgage Brokers
Top 11 NMB broker Tracey Blore says that working outside of the nation’s capital cities gives whole new meaning to the phrase, ‘everyone knows everyone’. As a mortgage broker, however, this is a massive advantage.
“There really is no anonymity,” she says. “It has taken me 13 years in business to develop the reputation I have today and now I have a strong base of clients and referral network. As a result, I barely have to advertise. The majority of my business is local and predominantly referral based, [and] this would be much harder to achieve in a metropolitan area.
“Within our regional area we have a huge networking system … so you become extremely well known for your abilities, character, knowledge, and trustworthiness or lack thereof. There is nowhere to hide, therefore your reputation, once earned, will be the strength or downfall of your business,” Blore says.
However, Blore pinpoints the trade-off that comes with the benefits of the regional broking market, adding that loan sizes are a lot lower than in the cities.
“We have to write three to four times more deals to make the same income as a city broker,” says Blore.
There are also the postcode restrictions by mortgage insurers to overcome, and the less common nature of employment of her clients which means a lot more time needs to be spent on loan structure.
“Shearers who get paid by the sheep … try working their wage out!” Blore adds.
“We work really hard at being involved in the whole process from beginning to end.”
With the running a small brokerage like On Trac, there is also the challenge of not having any support staff to take the administration side of the business off Blore and her colleague’s shoulders, which takes away from the time that could be dedicated to bringing in new business.
These challenges mean that technology plays a massive role in the success of Blore’s business.
“There is barely anything we touch that does not require technology, from the phone system to the cloud where we up load all our client files. We submit our application to the bank via a very clever software program, we order valuations via the same [program]. We have a special program provided by our aggregator in which we keep all our client details and tracking of each file on a day to day basis. Without these facilities it would be impossible to provide the privacy required for our clients, to monitor and keep up with each stage of the application and to prevent our offices turning in to one big storage facility!”
The biggest opportunity for mortgage brokers in the coastal town of Port Macquarie in New South Wales is the plethora of new developments coming to fruition, according to Mark Collins, Aussie Port Macquarie franchisee.
“Port Macquarie is undergoing a construction boom at the moment, with a huge amount of land scheduled to be released in 2016 on the mid north coast and surrounding areas,” he tells Australian Broker.
This is an opportunity which Collins says the brokerage will be actively targeting this year.
“The key is for us, as a team, to market effectively to new home builders and to keep up with the changing credit policies from the banks. We have already put a number of measures in place to build relationships with developers and builders, and to provide ongoing and easier access to information for those looking to build. The aim is to position Aussie Port Macquarie as the experts in this space.
“This does not take away from the ongoing work we do with existing home buyers, investors or those looking for a better deal, but given the changing market this year we will focus a larger portion of our resources into the highest growth area which for us is construction.”
Aussie Port Macquarie is a two-man operation with Collins joined by fellow broker Craig Smith. Collins says their business is primarily residential, however, the two specialise in different areas of residential lending.
“Craig owns multiple investment properties and is currently developing a block of townhouses. He fits in really well and will be helping investors no matter what stage they are at, as this is his passion and is very much his area of expertise and one he is continually learning about,” Collins says.
“I focus mainly on construction deals, as I have just built a house myself so I understand the dynamics of construction finance, grants, costings etc. very well. This is very much my passion and an industry I am becoming more and more involved with.
“We both assist with refinances and we certainly do a portion of commercial finance but this is not our primary focus.”
North Coast Financial Solutions
For Sonny Singh, living and working on NSW’s beautiful beachside town of Byron Bay has been a blessing over the past two years.
“Byron Bay over the past two years has experienced significant growth in property prices and very quick sale periods. Many properties have been purchased in a very quick timeframe and auction clearance rates have been very high,” he says.
However, history has shown him that Byron Bay’s market has severe peaks and valleys, and this can present challenges for mortgage brokers in the area.
“Now we can see prices showing a little more stability and as such sentiment is; that growth will slow in the coming 12 months. Byron Bay is known for its market volatility and as such we often experience issues with valuations for the higher end properties. Sometimes people will purchase a beachfront property during a ‘boom’ period for several hundred thousand dollars more than we get bank valuation for,” says Singh.
However, Singh says that he is stil in an extremely unique position as a broker. Because unlike other regional areas, Byron Bay’s loan sizes are almost on par with those of the capital cities.
“The main benefit of being a broker in Byron Bay is that we live in a regional area yet our average loan size is similar to a broker writing loans in Sydney or Melbourne. With Median house prices relatively high for a regional area we can rest assured that the majority of the loans we write are decent in size.”
While Singh states that he focuses on residential lending, over the years he has made sure of partnering with other professional service providers to expand and diversify his offering in the most seamless way possible.
“We have set our goals to focus on residential lending as we feel that it is our area of expertise and that we can offer the client the most professional service when we focus on what we are good at. However, we do have alliances and partnerships so when we come across commercial lending, financial planning and other needs the client can be looked after under one banner,” Singh says.
While many mortgage brokers have backgrounds in banking, Singh’s personal experiences as a banking customer were what prompted him to become a mortgage broker.
“I was inspired to be a broker by the many experiences I have had in retail banking as a customer. I had gone into my bank three times to get a home loan and could not see the same person twice as they had now moved onto a different role or no longer worked in the branch. I ended up going to a broker where I genuinely felt that he cared about my purchase and had a vested interest in me successfully purchasing my first family home. This level of service and genuine care for my transaction motivated me to get into the industry. Within three weeks I was employed by the broker that did my transaction,” Singh explains.
Persistence, ethics and hard work are the most vital ingredients to achieve success as a regional broker, according to Troy O’Keefe, managing director of TOKA Finance in Pottsville, located in the Northern Rivers region of New South Wales.
These are traits he has had to learn operating in a town with a population just shy of 6,000 residents. Unlike larger urban cities where the housing market reigns supreme and dominates headlines, and you can find a mortgage broker franchise in every suburb, regional towns still often hold that traditional mindset – even in a town where the median age is just 38.
“Customers still believe that brokers charge hidden fees. People aren’t aware that they can get loans outside bank locations,” he tells Australian Broker.
There are also fewer opportunities to diversify in a regional town with not as much development. This is why O’Keefe says his business is primarily focused on providing residential loans.
“Generally speaking, TOKA provides residential lending as it fits into the local niche market better.
“The conversion rate for residential loans is much higher as general commercial properties are few and far between and quite often are family owned – and hence handed down with little or no debt level.”
However, O’Keefe says Pottsville is about to have its own housing boom, which will provide his business with a big opportunity this year.
“Pottsville and Northern NSW is a high growth area in regards to the development of new houses, hence new home loans.
“Interest rates are also at a record low so this will help the local demographics to more easily qualify in regards to servicing.”
Outside of the unique challenges and opportunities regional markets may present, O’Keefe says there is no secret to finding success as a broker – you just have to learn from experience and keep yourself honest.
“Make sure all costs are disclosed to your customers so there are NO surprises,” he advises.
“Also, if possible, aligning yourself with a successful mentor is extremely important. Being able to bounce ideas off someone else who is in the industry is always an added bonus.”
At the end of the day, however, O’Keefe says the great Australian dream is still very much alive across regional Australia.
“I find within the regional demographics, the ordinary customer still rates owning their own property as very high in their ‘bucket list’ of life long goals.”
Choice Home Loans
Peita Davies started her career in mortgage broking in 2002 writing loans at her kitchen table. Now, she occupies two office spaces, oversees five staff and contracts out two brokers. For her, what is the best thing about broking in a regional market is also the thing that holds the most opportunity - the community.
“I get an opportunity to be really involved in our community as I work here, live here, my children went to school here - everything is built around a personal relationship. I now even have clients that I went to primary school and high school with as I still live and work in the region that I grew up in, and Facebook now keeps every one up to date on what people are doing, even career wise!
“This in in turns builds lifelong relationships with clients, not just one transaction, as we are well known, trusted and respected,” she says.
Being open and communicative and even vocal about what you do for a living, says Davies, is the best piece of advice she can impart to new regional brokers.
“Be present in your community and tell EVERYONE what you do. Like I mentioned earlier, get on board with social media you will be surprised at how many people you know.”
However, working in a regional area is not without its headwinds.
“I need to remember that every interaction that I have with people is a reflection of my business. I hold my integrity very close to my heart, so there is no room for laziness in a small community.”
In addition, she adds, from a business point of view a challenge she faces is the lower social demographic region she services.
“This means lower loan sizes and often clients coming from a smaller income base. I can often work with a client for months and months to educate them on preparing themselves for home ownership.”
Business growth, then, is one of the more difficult aspects of broking in a regional area, especially given the fact that the Blue Mountains is heritage listed, meaning there is no opportunity for new infrastructure or building developments.
Diversifying your product portfolio is one way to face these obstacles head-on, in her opinion.
“I think offering a diverse product range is absolutely vital to the ongoing strength and growth of my business. So much so that this is my focus for the next year, but not only offering new products to my client base but by building a mentoring and training business that will support other brokers in this region,” Davies says.
Antony Muir, principal of Mortgage Choice in Bundall – a small town in the Gold Coast, west of Surfers Paradise – recalls one of his most memorable client experiences and one of the reasons why he enjoys being a broker in his local community.
“I was assisting a client with the purchase of a beachfront property that their existing bank would not provide finance for,” he told Australian Broker.
“The client was settling 16 days from the date he met with me, and we arranged approval and settlement within the existing contract terms to avoid default. Since this experience, my client has referred three more prospects that have converted to new business.
“I get great satisfaction in getting the tough transactions through under pressure.”
With a population of about 4,200 people, Muir says this sense of really helping the people in his community is important as a regional broker. Mortgage Choice Bundall is a “strong supporter” of locally based charity groups and is also heavily involved in local school events.
When it comes to his business, Muir expects a lucrative few years. Not only does he predict low interest rates to hang around and entice consumers, but he says Bundall should expect major flow-on benefits from the Commonwealth Games to be held in the Gold Coast.
“Brokers are experiencing stronger market share as continued low interest rates are on offer. Consumers are very aware of interest rates and brokers can expect increased lead volumes from people looking to ensure they have the best offering for their finance needs.
“However, commercial finance opportunities will also create more business over the next few years. As the Gold Coast expands leading into the Commonwealth Games in 2018, I expect commercial opportunities will increase as businesses relocate and set up in our area.
“Residential is our primary source of business, but I am targeting more commercial opportunities as I really see this as a massive area of growth in the future.”
In order to capture these new opportunities, Muir says it is important to continually look for ways to promote his service in everyday life – a piece of advice all regional brokers can learn from.
“Whether it be when you’re ordering coffee or having lunch at your regular venues, you will be surprised by how much your discussions impact others, which can in turn create more business.
“If you are doing it tough, remember that you control your outcome.”
Priority Home Loans
A typical client for Bryan Coleman, director of Priority Home Loans in Tamworth – a major regional city located midway between Brisbane and Sydney – is just as diverse as its major urban city counterparts.
This husband and wife team service first home buyers, investors, business owners and existing customers wanting to upgrade or renovate, and have two credit advisers and a loan assistant working for them at Priority Home Loans.
Being from a larger regional centre with a population of almost 39,000, Coleman says he is lucky to have a diverse referral base, including solicitors, accountants and real estate agents. However, the biggest opportunity he sees for brokers in the “country music capital of Australia” are the referrals from existing clients in a market brimming with opportunity that Sydney, Brisbane and Melbourne don’t have.
“Our referral base is extensive due to being involved in the Tamworth area for 15 years,” he told Australian Broker.
“An example being customers that we helped in the early years who have siblings who are now looking for their first home or are referring their children to our office for experienced advice.
“Due to homes being cheaper in the country, using the First Home Owner Grant and, if needed, the parents own home, they are able to move into a new home earlier.”
However, Tamworth does have its own unique challenges – the drought being the most significant challenge this year.
“Tamworth and the surrounding areas are in drought so lack of water will influence a lot of people, Coleman said. “But it also gives businesses a feeling of uncertainty with regard to the economy, where some people may not want to enter into more debt at this uneasy time.”
Coleman is coming prepared, though. To overcome these challenges and grow his business this year, he announced he will be launching TV advertising for the first time.
“We have being doing radio advertising for 15 years, so people recognise our brand and our people,” he said.
“We are just organising an advertisement to be shown on the television as well, which is a new way of generating business for Priority Home Loans. This means not only will people in Tamworth and surrounding areas know our name and voices, but they will be able to see our faces as well.”
The biggest challenge for regional brokers, according to Travis Hole, lending manager of Zobel in Mount Gambier, is the smaller average loan sizes. A regional broker can’t rely on big home loans paying them more commission.
“As I presume is the case with a lot of regional brokers around Australia, particularly in South Australia, we’re consistently challenged by a low average loan size given the medians in the area in which we’re based,” he told Australian Broker.
“Hence there’s a real focus on not only ensuring we have a substantial market share of lending in our region directly, but also to provide a greater range of services to those clients and utilising technology to best service clients out of the region.”
Community engagement is often touted by regional brokers as the life blood to their business, and Hole agrees. He says smaller loan sizes plus a smaller population means community involvement equals survival.
“Being a relatively small city of only 25,000, our engagement with sporting and community groups as well as local charity and other fundraising initiatives is a key component of our business.
“Either through direct involvement on committees or in clubs, as well as involvement with community events, it plays a big part in our ongoing marketing or business development plans.”
But Mount Gambier, located to the south-east of Adelaide on the Victorian border, has a few tricks of its own up its sleeve for 2016, which will see big opportunities for brokers.
“After several years of some uncertainty due to the forestry forward selling by state government, there appears to be some genuine confidence amongst small business and consumers in our region, from which we’ve certainly seen an increase in the amount of transactions locally in terms of property sales,” Hole told Australian Broker.
“On top of that, we see a real opportunity for first home buyers to come back into the market moving forward after being somewhat quieter over the past few years also.”
To take advantage of these opportunities, Hole says diversification will be front of mind for Zobel this year.
“Our group has always had diversification front of mind in our business plans, which will continue this year with further recruitment in the commercial lending and asset finance space, as well as an expansion of our service offering overall under a full and comprehensive financial services banner.”