Crush Your Enemies Totally*

*This title is in fact Law 15 from Robert Greene’s enlightening book The 48 Laws of Power.

Rate, rate, rate, rate!

You have spent many long hours and many late nights working through a truly wonderful client’s pre-approval stages. And after dozens of hours, weeks, or even months of work, the accepted offer, the high stress of a conditions removal period and then, just days before the completion date, the client calls you up with, ‘Hey, I am not sure what to do here, but another Broker has offered us a rate X% better than what we have with you… and it is from the same lender.’

What’s that now?


Be Calm.

OK, still with me?

Let’s review this situation from the beginning;

Step 1.

Did you do your very best to confirm with the client up front that you were the only person they were working with? Did you ask that question more than once, during the pre-approval, and again once the offer went live? Did you make it clear your relationship with the each other is much like that with their Realtor, i.e., clients do not hire three different Realtors to approach the same seller, nor should they retain the services of more than one Mortgage Broker to approach the same lender.

Step 2.

Was the client unduly influenced by another source, perhaps their own Realtor, pushing another Broker or banker, a family member, co-worker, etc.?

This happens.


The answers to these questions lead you to a fork in the road.

Was the client less than transparent and flat-out shopping you, hustling and gaming for a written approval to take back to somebody else to have it beat? Then make it very clear that you could have simply written a market-rate letter up front (something I often offer to do in the early stages of the application process to end a relationship fast and simply rather than slowly and painfully) and sent them back to their preferred lender with said letter in hand.

No muss, no fuss.

This kind of client needs to be set free. You do not want referrals or repeat experiences from them, at least not ones that cost you hundreds of dollars up front (appraisals) and dozens of hours.

But if this situation is not the result of the client’s devious scheming, but just the outside influence of a third party, then we move to step #3 for retention purposes. Keep in mind, you should assume nothing about how the client came to have another mortgage offer, you always ask the questions — politely. Above all else you should never assume your client is being untruthful with you. Politely get to the bottom of how they came to have a quote or an approval from another Broker.
If the other Broker, or banker, is truly a threat, and you want to retain the transaction, and more importantly the client – and still more importantly the relationship with the referral source — then proceed to Step 3.

Step 3.


You want to play?

OK, Mr. or Ms. ‘rate-buydown-is-my-only-trick’. Let’s play!

For honest and unassuming clients, who legitimately did not realize the extent of the damage that they can do to a Broker’s business through creating a fully underwritten yet unfunded mortgage commitment, it is going to be a great day. These clients will be smiling; likely a bit uncomfortable once all is explained, but smiling in the end.

I like to start with a phone call to the client, explaining the nature of the business and how buydowns work. I explain that, just like them, I like to get paid my regular wage for a days work. Just because there is a worker who wants to do your job for half price does not make it right, or ‘how it should be’. However in this one instance, I am going to beat the other Broker at their own game. The other Broker will lose the business, I will lose my paycheque, but you — the client — you are going to come out the big winner.

I also make it clear that this is not standard practice, and I cannot give their friends the rate that they are about to get. But I can give them the stellar service that I delivered all the way through the process this time around.

For that other Broker, the one who thought they would swoop in and scoop that nicely wrapped file now that all the heavy lifting and stressful work has been done… well, for that Broker or banker it is going to be a disappointing day.

For me, it is just a mediocre day. Neither great nor terrible.

In these rare situations I buy the rate ALL the way down. I will use up my VB if the lender allows it. And I still cover the client’s appraisal.

But wait there’s more…

I still offer my standard $250.00 legal fee credit (something I do not advertise — clients just receive it partway along the process as a bonus). And yes, this full bore attack mode does result in my paying more money to complete the client’s file than I am earning in some cases. In fact I have been known to pay 100% of the closing costs in a highly competitive situation. It’s cool. The message to the other Broker or banker is that I will not lose my approved clients to them. Ever.

And they will not build a successful business on rate buydowns, at least not by trying to poach clients with complete files. Instead they will actually have to try and build their business on quality Brokering. Advising, working the long game, being legitimate business people. Not being lazy and sliding in at the eleventh hour for a cakewalk approval. Sure I get that this is a business model for some, I get it, I get it. And hey, they have less stress, work fewer hours per file, and likely earn more per hour than I do. Good for them. Find a client elsewhere.

How does my zero income save-the-file-at-any-cost approach make any sense to use?

Well, only about one file in fifty seems to go down this path, so it works just fine. And I clearly explain to the client the mechanics of the entire process. The client understands that I am a full-service provider, and that is why I do not discount — quality is not discounted, substandard goods are discounted.

Once it is explained to them that the other Broker is doing one tenth of the work, they start to see the value in what you have provided. And many clients offer to just split the difference, but I do not take that kind offer when the client makes it. That is short term, I want them to have an experience to remember. I always stick to what I have said I will be doing for them.

Step #3 actually feels great to implement in the moment as you have gone to battle and won. Yes, you have suffered casualties… luckily just dollars. Admittedly it is less exciting come payday.

The message to the competition is clear: ‘You will not poach my clients, and I will do this all day long if I have to. So unless you step up and start earning your clients with expertise, you will not last in this business’.

For an up and comer, every dollar is like oxygen, and if this is how they want to come at me I will do all I can to cut off their supply. Because at this point I know I can hold my breath longer. Harsh? Not at all, I am encouraging that Broker to learn their craft and win with more than just a cutthroat rate. Value lasts. Flashy new brands competing on price come and go; quality stands the test of time.

My view is that I have already invested the time in this file, it is wrapped and ready to fund anyways, and if the client is gone then so in the income, and more importantly so is the future relationship. So lose the income, but retain the client.

Also the funding ratio is on the line, again – the commission is already lost so at least preserve the funding ratio.

Time and money are out of the picture either way at this point, all that is left is all that mattered in the first place, the relationship(s).

Again, be aware that not every relationship is worth fighting for, and you will graciously show the exit to some, wishing them luck. Others you will do all you can to save and keep close. Knowing the difference is important.

When it is a top-notch client, connected to a top-notch referral source, game on!

The bottom line in these situations is that someone has come along and stuck a knife in your leg, leaving you two options.

  1. You bleed out while letting them stick you again and again.
  2. You turn around and face them and say ‘So you brought a knife to a gunfight eh?!?’ and then you pull out a rocket launcher and finish them off before they know what hit them.


Thank you.

Dustan Woodhouse