One of the services I have provided over the years is referring competitive mortgage brokers to my clients. Of course, I always recommend my clients do their own "shopping" as well, however, many ultimately come back to the stellar rates and fees offered by my well-investigated referrals.
Why do I refer mortgage brokers?
- Need a pre-approval on a Saturday afternoon? Done.
- Is my buyer really qualified? This saves everyone time.
- Client will be exposed to best rates/terms available. Even if they don't select my vendor, many become more actively engaged in their lender search, which leaves them far better informed.
- My client and I will receive top-notch service throughout the transaction, and in return my preferred vendor will be rewarded with additional referrals.
Now for my nightmare...
Two weeks ago a buyer called on one of my listings. Saturday afternoon, called my preferred mortgage broker, he called my buyer, pre-approval within an hour. Contracts delivered, buyer excited, signing next day. Next morning arrives and I get a call from Mr. Preferred. "Uhh...slight problem. When I sent the second-home purchase programs over to your client, we also talked about refinancing. We may be doing a refi first, so his purchase may be on hold for a month."
"Doesn't he qualify for the purchase now?"
(pause) "Uh, yeah, but I thought it might make sense for him to cash out of his house so he can have some carrying money for his second home purchase."
Again, "But, doesn't he qualify for the second home purchase now? You can always do a refi after you get my transaction done."
"Let me talk to your client and I'll get back to you."
Now, we can all see where this is going. Turns out Mr. Preferred did a great sales pitch on a refi...even got the application fee same day. I'm out, the mortgage broker is in. Will he be back in 30 days? Possibly, but I already sold that listing.
Do I have expectations from the vendors I refer? Certainly. Service, commitment, and the often-overlooked most basic of them all: loyalty. Have I been making a mistake by referring vendors as part of my service? A large number of my clientelle has appreciated my referrals, but I am left to wonder if I should stick to selling real estate and leave these ancillary services to someone else. Perhaps the only referral I am left to provide is a visit to their yellow pages.
To refer, or not to refer. Feedback is greatly appreciated.