How should brokers educate clients on alternative solutions?
The company’s senior director of originations told Canadian Mortgage Professional that the ability to ask the right questions was one of the most valuable skills in a broker’s possession to deliver the ideal alternative solution for each client’s specific needs.
That means that instead of simply listing the various options available to a client, it’s best for brokers to start their conversation by asking one or two incisive questions that help them understand exactly what they’re hoping to get out of the financing – and, crucially, which solutions may not be the right choice for them.
“Asking questions is critical, because you can uncover what’s important to your customer and then give them the information they actually need to achieve their objective,” he explained. “As a broker, you’re playing that role where you need to provide them with direction, coaching, and mentorship.
“To do that, you need to ask questions and learn what they need. You want to find the solution that best fits them. It doesn’t matter if the financing is with an A, B, alternative, or private lender – if the solution isn’t right for their situation, it’s the wrong solution. You can only find the right solution by asking questions.”
Take a client put into a five-year fixed term with a bank because it was the lowest rate. Halfway through the first year, to the broker’s surprise, the client calls and says they completed the renovations and are selling the property; this client will face a steep penalty for breaking the contract early. Stanley said that in this case, a fully open alternative solution with a higher rate might have been a better option for the client.