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Brokers who are sick of losing deals to property spruikers have been advised to actively warn clients about the “clear potential conflict of interest”.
Michael Sloan, who is a broker and also a director of property investment firm The Successful Investor, wrote in a blog for The Adviser that spruikers have a sales advantage over brokers.
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“Have you ever bought a new car and noticed that they won’t give you their best price until you are ready to buy?” he said.
“It’s the same with brokers attached to property spruikers – most spruikers have brokers on staff and they get to go last, which puts them in the prime position to write the loan instead of you.”
Mr Sloan said clients have a stronger relationship with the person who sells them the property than the person who prepared their pre-approval.
That makes it hard to resist when the real estate agent advises the client to use an in-house broker, he added.
“And you know what else really hurts? That broker has every incentive to bring the client’s other loans across – the ones you wrote – and you lose the trail,” he said.
Mr Sloan said one way to stop this happening is to warn clients about the potential conflict of interest so they are less likely to accept the agent’s advice.
“Be proactive, and recognise that if you have a client database, some are looking to buy an investment property right now – and there is every chance they will end up in the arms of your competition,” he said.
[Related: Are you game to ask the cash flow question?]
Click here to read Michael Sloan’s latest blog.
