This BDM switched from a career in IT and then never looked back
A lot has changed over the past three months, presenting challenges for both brokers and lenders
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A few years ago, Derek Farmer jumped the fence from selling properties to helping borrowers finance property purchases.
The Sydney broker spoke with MPA about his decision to leave the real estate game and why you should never judge a book by its cover when it comes to helping clients.
Imagine if broking was like selling properties
After about eight years working as a real estate agent on the lower North Shore, Farmer knew it was time to change paths. While he was successful in his career, he found it quite limiting in its nature.
“Imagine doing broking but you can only do purchases and you only have half a suburb of clients – and you have to operate within that suburb.”
For Farmer, broking offered a far greater scope of potential work and clientele. He joined Shore Financial in early 2017, gaining his accreditation in May that year.
“I’ve done investment purchases in Perth, Canberra, Melbourne and Brisbane.”
“There’s refinancing as well. Basically, there’s so much more opportunity and, to be frank, compared with real estate, less competition.”
“Almost every piece of business I went for in real estate, I was up against three other agents.”
“That doesn’t happen so much now. People find a good broker – and once they’ve got a good broker, they are just happy to move forward with that one.”
Short term pain for long term gain
One of the biggest challenges Farmer has faced as a broker is the amount of paperwork that has come alongside the countless lender policy changes of the past few years.
In order to overcome this, he decided to take on a support staff member – someone he views more as an admin partner rather than an assistant. He took this crucial step just five months after gaining accreditation.
“I didn’t skimp on them – I found the best one that money could buy.”
“It was an over investment to start with.”
“In the early days I was only doing $1-2M a month average and she had the capability of doing $10M a month – so a lot of the time she was sitting here twiddling her fingers, but I thought, this is going to be short term pain for long term gain.
“Because I put her on early, we’ve had good growth in the short period of time that we’ve been here, and much faster than a lot of the other brokers in the industry.”
A home loan for a senior
Farmer recalls the most memorable finance situation he has come across so far – an 83-year-old man with dreams of home ownership.
“His opening line was ‘I’m renting and I want to get a home loan’.”
“I looked at him and I found it really hard to keep a straight face.”
Wanting to do the right thing and give his situation the attention it deserved, Farmer entered into a long discussion with the man.
“I thought, I’ll just explain to him what exit strategy is and 30-year loan term, income and expenses, how the bank will look at it and assessment rate.”
“But you can never be blasé about these things – by the end of the conversation he’d revealed that he earned $250,000 a year from his SMSF, and the value of that was $7M.”
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