If the flurry of regulations and legislation during the last 18 months has taken the focus of your attention, be aware that the next 18 could well have an even greater impact on you and your business.
The reason is that the introduction of Home Information Packs (HIPs) in June next year will change the dynamics of the mortgage market – creating both opportunities and challenges for you.
There has been some scaremongering in the mortgage media recently about HIPs and most of it has been surprisingly ill-informed.
LMS has been involved in HIPs in the UK for three years working closely with the government and, although the regulation process does have some areas yet to be ironed out, the reality is that similar sellers’ packs are already working successfully in other countries and will do so here.
Far from being something to fear, HIPs should be embraced by brokers and introducers as they will enable you to provide a better service to your clients and earn you greater profits.
HIP benefits
Firstly there is the opportunity HIPs will create for you to pick up mortgage business early.
By ensuring you have good communications and relationships with your clients, you will be the first to know when one of them is looking to move home as they will want to know how much they can afford to borrow.
If you are able to organise their HIP for them at this point, you will not only strengthen your relationship with them by providing this additional service, but you will also be even better placed to provide them with that new mortgage.
Working with the right HIP provider should enable you to order the pack online for a competitive price with flexible payment terms, quickly and easily, and branded with your firm’s name.
The branding will have the benefit to you of raising your profile, and to your client of being able to choose whoever they want to sell their property. This is a very important selling point for introducers and mortgage intermediaries.
Secondly, in a market where everyone is working harder for more competitive rates, you will be able to earn a useful commission from each HIP provided.
Thirdly, having provided your client with a HIP, you will be ideally placed to offer them conveyancing services which can also earn you valuable fees.
These differ between operations, however the LMS scheme is flexible (you choose what you want to charge) and pays firms up to £200 for every conveyancing referral.Where a seller is also a buyer, that referral fee can be doubled to create additional income of up to £400 per client, so several thousands of pounds of pure profit can be earned a month with little or no additional outlay.
The right provider
Again it will be vital that you are working with the right HIP provider who has the technology, depth of experience in processing high volumes of transactions, robust systems and resources to provide a seamless conveyancing service.
For example, during the years we have been developing HIPs, in-depth research and development has also been carried out into faster ways of handling remortgaging conveyancing.
When you are helping to manage some 300,000 transactions a year, and enabling more than £26 billion in loans, even the smallest improvements bring big rewards for everyone in the chain from broker, through lender and packager, to consumer.
These developments have also created converging technology which can manage data, documents and processes so that, with just a few simple clicks of your computer mouse, you will be able to provide both pack and conveyancing services automatically and quickly.
Time is of the essence
In the new HIP environment, time will be of the essence, as a HIP will have to be prepared before the property can be marketed, so you will need to choose a pack supplier and conveyancer with the resources and systems to give you the speed, reliability and cost efficiency you and your clients will require.
The reality of HIPs is that by providing a fast, efficient and technology driven pack service, you will be able to engage with clients earlier, provide them with broader and superior services, and earn more money at the same time.
You can start right now by simply signing up to a fast online conveyancing service and actively promoting it to your current clients.
This will make a real contribution to your business with profitable extra revenue, a better service and useful preparation for the arrival of HIPs next year.
Whatever you feel about HIPs you certainly cannot afford to ignore them. Pretending they are not happening, or taking a ‘wait and see’ approach, will simply hand over the valuable opportunities to your more forward-thinking competitors.
Dominic Toller is director of marketing and new business at LMS
