Summary of SMH article: The real estate industry has once again come under scrutiny, with growing concern around the way some agents win listings by inflating property values, only to later pressure vendors into reducing expectations. While underquoting and vendor manipulation may look like a purely real estate problem, the underlying issue is relevant across financial services, including mortgage broking. Overpromising to secure a client and then trying to “condition down” expectations later can create reputational risk, financial harm to the client, and potentially long-term compliance issues for the broker.
The Parallels in Mortgage Broking
In mortgage broking, a similar scenario occurs when brokers “sell the dream” by overestimating borrowing power, suggesting unrealistic interest rates, or promising turnaround times that lenders cannot meet. Initially this may win the client’s trust, but when the reality shifts—whether due to tighter credit assessments, servicing constraints, or lender credit policy—the client feels misled. Just as in real estate, one exaggerated promise at the beginning can fracture long-term relationships and damage referral networks.
The risks are twofold:
- Client mistrust – Losing credibility not only harms repeat business but can also damage broader reputation in an era where online reviews and word-of-mouth dominate lead generation.
- Regulatory pressure – With ASIC already focused on broker conduct and responsible lending obligations, any hint of misrepresentation could trigger compliance risk.
The Opportunity for Brokers
While some real estate agents cut corners in pursuit of quick listings, mortgage brokers have an opportunity to position themselves differently by anchoring their value proposition on transparency and trust. Where an agent may manipulate expectations to win the listing, a skilled broker can earn loyalty by telling clients what they need to hear, not simply what they want to hear.
Practical steps include:
- Realistic pre-assessments: Provide clients with accurate borrowing assessments upfront, clearly outlining scenarios that could shift approval outcomes.
- Client education: Explaining how rate movements, lender appetite, or policy updates affect loan scenarios creates informed buyers who are less likely to feel blindsided.
- Long-term view: Brokers can build sustainable growth by focusing on lifetime client value, rather than the “one deal and done” approach.
Why Private Lending Matters Now
As mainstream lenders tighten policies or reject complex scenarios, many borrowers fall through the cracks despite being solid credit risks. This creates an opportunity for brokers to expand their toolkit with private and non-bank lending solutions.
Private lending options available through groups such as Oasis Mortgage Group provide flexibility for clients who may not fit the restrictive criteria of the banks, including self-employed borrowers, clients with unusual income structures, or those needing short-term bridging solutions. By being proactive and solution-driven in this space, brokers not only protect themselves from the pitfalls of overpromising but also differentiate from competitors who rely too heavily on major bank panels.
Balancing Ethics with Commercial Growth
Competition in both real estate and mortgage broking often tempts professionals to inflate expectations in order to secure business. The lesson from recent scandals is clear: the short-term win from “buying the deal” comes at the expense of client trust and long-term business growth.
For brokers, the path forward lies in responsible, transparent advice combined with a diverse product strategy that includes private lending. Those who do so can convert market volatility into growth opportunities and position themselves as trusted advisers, while others risk being viewed with the same skepticism now overshadowing parts of the real estate sector.
