Hello Fellow Posters,
I would like to know what people's opinions would be on the idea of the so called "ONE STOP SHOP" real estate agents that sell you the property, offer the services of their internal mortage broker to finance the purchase of the property and perhaps even offer the conveyancing services of an affiliated conveyancer/solicitor.
Have any of you guys been offered such a proposition when you purchased a property recently? What went through your mind with your thought processes? Did you feel you received added convenience, better service or even lower costs by going through a Real Estate agency employed MB and/or conveyancer?
Do people really think it is difficult to find a mortgage broker these days and that you actually save time by using the one recommended by the real estate agent selling you the property? Will the settlement process be much quicker if the real estate agent, mortgage broker and convyancer all work under the same roof?
Is "potential" conflict of interest an issue for property buyers? When buying brand new property and the vendor is the builder, is it of a concern to you that the mortgage broker offering you the finance is affiliated and perhaps even employed by the same organisation as the salesman trying to get the highest sales price for the builder? Is there concern that your mortgage broker who is supposed to act in your best interests may also need to please the real estate agent (and hence the builder) when advising how much you can and should borrow? Is it of concern to you that "potentially" your conveyancer who is supposed to act in your best interest has a relationship with the real estate agent (and hence the builder) and may withhold important aspects of the property settlement that is beneficial to the builder but detrimental to the buyer?
In an ideal world, all parties involved would act ethically and within the best interest of the client. But does the supposed benefits on engaging one-stop-shop services outweigh the potential conflict of interests that may arise from such situations. Maybe there are measures to deter such dysfunctional behaviour which are not well known to the public that experienced people may want to share with all of us?
So past clients of such one-stop-shops and fellow property investors/owners, do you have any thoughts on this topic? I would be interested in what people think about this.
Cheers
Hi Kevin …
Firstly I see u r an accountant and a finance broker … this is a potential conflict as well i think.
Secondly this has been a past bone of contention for many years … etc
I know many accountants who refer business to other independent companies and get a referral fee … this could also be enticing or guiding the client as well. It's not just accountants it is many professional services. I don't mind the referral fee and passing on business but i personally mind double dipping and charging huge fees like "Sample and partners" and others do/did etc
Personally IF the one stop shop provided and ethical service and saved clients money and time thats fine by me.
All services should be free and all commissions and trails should be legally disclosed.
We ar currently lobbying to the respective departments to have unlicensed finance brokers selling or recommending investment properties. There is currently a new disclosure certificate being drawn up by the department of fair trading to cover this. There are still finance companies making money from investment property commissions selling for and on behalf of desperate builders … very soon every builder will have to sell via a licensed agent and every real estate CONTRACT will have a disclosure on the front page of who sold, recommended the property to them including their indemnity insurance and lic. numbers.
Things are closing in but we all kow how slow the ASIC – ACCC and Dep of FT are.
So I suggest you call the above departments and get clarity then advise us here to your findings … In short it only comes back to two things Money and Money
Sophisticated and or Unsophisticated investors … or poor mum and dads who get sucked in by hungry slick lying two faced opps haha
One stop for me "Yes" as long as all fees and charges are properly disclosed.
D
D,
I'm all for regulation that aims to achieve more disclosure for consumers. Consumers benefit from understanding who gets paid what and from whom. We can all understand the motives behind every player in the process better if all commissions and profit sharing are disclosed.
All mortgage brokers have an inherent "potential" for conflict of interest. Borrowers are interested in getting the best loan possible and some MB's may not direct their clients to the best loan for the borrower (but rather the loan that maximises their commission). I'm no different to any other broker and it will require proper commission disclosure (which National Broker regulation will attempt to achieve in the near future) as well as evidence of ethical behaviour, to close that gap of "potential" conflict of interest.
Being a Chartered Accountant, I risk losing my qualification if I don't act in the best interest of my clients. With all the long, hard study hours I put through to get the CA qualification, I will do my utmost best to ensure I keep my CA qualification so ethical behaviour is personally very important for me.
But back to my original question, do the one-stop-shop real estate agents/brokers provide such disclosure? And even if they did provide full disclosure, what is it about the one-stop-shop model that is so appealling to consumers? Is it the convenience? Is it really that hard to find a separately owned broker and conveyancer these days?
D, I'm glad you can find comfort in using the one-stop-shops for your personal needs. What about the rest of the forum members out there?
Regards,
Dear Kevin,
We you and me cannot stop them on this forum, you and I as qualified professionals should spend our time providing the names of these people to the ASIC, ACCC and the DFT.
This forum IMHO is to help and guide new and unsophisticated investors … I suspect that the greatest number of people ( 80% )here are under 30 years old and wanting to make MONEY in real estate.
Lets expose the NAMES of the individuals and companies here so the good people don't fall into their web of lies and deceit and lose their money … then write to the above authorities and let them do their business … Kevin it's worse than you think out their.
D
It is great to see discussion like this as it does give novice investors like myself some insights that are hard to find. Thanks for your point of view D, it is good to point out potential traps.
In my opinion, one stop shops need to be evaluated on their merits. Some offer a great service and value-add whilst other just bloat their already fat margins. Each needs to be evaluated. As always, if you are unsure about an offering ask someone who is more knowledgable, or a professional, for advice.
Great discussion guys
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