If you work in a shop and sell a jar of Marmite, the earnings are there straight away (OK I know that there are a lot more costs involved, holding stock, shop overheads etc, but let’s keep it simple for now). In the Australian mortgage broking industry, brokers are paid by the lender once the loan has settled. This can have a long lag time. I’ll give you an example. Let’s say that I meet a client in September, they have found a property to buy with a 30-day settlement date of the 3rd October (in most cases this would be the shortest time offered). But once the loan has settled, it’s not just a matter of “thank you very much Mr Broker, here is your cash for a job well done!” No, not at all! Every lender is different and has to reconcile all of the settlements before paying, some will reconcile daily or weekly whilst others will reconcile monthly. Once reconciled they will pay the broker’s aggregator. In the case above, imagine that the lender reconciled once a month on the 2nd and paid on the 9th October a week later, unlucky me! I just missed out this month, that means that my settlement will not be reconciled until 2nd November and paid on the 9th November. Once the aggregator has the funds, they also have to reconcile as above. Now, I am playing devil’s advocate here but it could happen at an outside chance that the aggregator reconciles once a month also and it just so happens that they reconcile and pay on the 8th November. Now I am really unlucky, no point putting a bet on Spurs to win next weekend! Finally, the commission hits my account on the 8th December just in time to do some Christmas shopping.
From meeting the client and being paid for my services, I have had to wait 3 months! I am just grateful it was not a 90-day settlement! Not to mention the time it took to get the lead in the first place in finding potential referral partners, gaining their trust, waiting for the business to come.
When a broker first starts out, the cost is not in the set-up of a mortgage business, its actually quite cheap in comparison with the Marmite seller, give me a laptop and a phone and I am away! (almost). The cost is in the lag time.
I have a couple of points to make here;
In summary, nothing happens overnight (apart from sleeping), you need to work at it, don’t give up, it will happen! Remain with your eye on your “why?”, make sure you have a consistent sales process to follow and as long as you are talking to people, you are at risk of doing business, be open to the opportunity!
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