How to deal with brokers
A broker is an individual person who arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be confused with that of an agent —one who acts on behalf of a principal party in a deal.
A broker is an independent party, whose services are used extensively in some industries. A broker's prime responsibility is to bring sellers and buyers how to deal with brokers and thus a broker is the third-person facilitator between a buyer and a seller. An example would be a real estate broker who facilitates the sale of a property. Brokers also can furnish market information regarding prices, products, and market conditions.
Brokers may represent either the seller or the buyer but not both at the same time. An example how to deal with brokers be a stockbrokerwho makes the sale or purchase of securities on behalf of his client. Brokers play a huge role in the sale of stocks, bonds, and other financial services.
There are advantages to using a broker. First, they know their market and have already established relations with prospective accounts. Brokers have the tools and resources to reach the largest possible base of buyers.
They then screen these potential buyers for how to deal with brokers that would support the potential acquisition. An individual producer, on the other hand, especially one new in the market, probably will not have the same access to customers as a broker. Another benefit of using a broker is cost—they might be how to deal with brokers in smaller markets, with smaller accounts, or with a limited line of products.
Before hiring a broker, it may be considered prudent to research the requirements relating to someone using the title. Some titles, such as real estate brokers, often have strict state requirements for using the term, while others, such as aircraft brokers, typically have no formal licensing or training requirements.
The word "broker" derives from Old French broceur "small trader", of uncertain origin, but possibly from Old French brocheor meaning "wine retailer", which comes from the verb brochieror "to broach a keg ". Media related to Brokers at Wikimedia Commons. From Wikipedia, the free encyclopedia. For other uses, see Broker disambiguation. For the not-for-profit organization "the Brokerage", see The Brokerage Citylink.
With so many different credit providers to choose from, you may decide to get a finance or mortgage broker to do the legwork for you. Brokers can help you find out about suitable loans or credit packages and arrange special deals. As with any adviser, though, it is wise to shop around yourself so you know what questions to ask. Check with ASIC that your broker is licensed to engage in credit activities or is an authorised credit representative of someone who is licensed.
Take the time to understand their fee structure, and make sure that your broker finds you a suitable and competitive loan - or you could end up paying more than you need to.
David and Carole were delighted with their new home. But four years after buying it, David was made redundant. They began to fall behind in their repayments and worried that their credit provider would sell their home to repay the loan. They approached a broker who advertised that he could help people in arrears on their loans.
David and Carole soon discovered that they were paying a higher interest rate on the new loan 9. Within 12 months of refinancing, they had to sell their home. Because of the refinancing, they owned even less of their home than before. Please note that this is a summary giving you basic information about a particular topic. It does not cover the whole of the relevant law regarding that topic, and it is not a substitute for professional advice. Using a broker Factsheet: David and Carole didn't check the fine print before signing David and Carole were delighted with their new home.
What you should know before you see a broker Brokers are not financial advisers and are not obliged to find you the best possible deal unless they specifically agree to do so.
So ask your broker exactly what loans or credit products they offer, and be prepared to ask questions about other home loans or credit packages on the market. Make sure you're comfortable with the commission and any benefits the broker may receive for recommending a loan product to you. Make a list of loan features you are interested in for example, if you're looking for a home loan you may want the ability to make extra payments and ask your broker whether it will cost more to have these features.
Avoid being pushed into signing a business purpose declaration - do not sign a business purpose declaration if the loan is for a personal or domestic purpose, including the purchase of residential property. Save up as much as you can, so you can borrow less and save on interest. Remember to allow for interest rate rises and anything that might affect your future income such as changing jobs.
Make a list of loan features you are interested in and be prepared to ask questions about whether it will cost more to have these features. Think about whether you need a broker. Some of the best deals on the market are available directly from credit providers. Look at other loans online or call other brokers to check what they charge and what they offer. Reputable brokers will want to make sure you get the best deal for your needs.
Clarify whether you need to pay anything for a first appointment to talk about your options. If not, talk to a few different brokers before making up your mind who is best placed to assist you. Check if the broker charges fees or is paid a commission by the credit provider. Ask whether you will have to pay anything to the broker if you decide not to proceed with the loan. If you are refinancing, take time to compare interest rates, product features, and fees and charges, and how these stack up against your existing loan.
Even a small difference in the interest rate can make a big difference to what you have to pay. You also need to factor in the costs of refinancing. Check if there are any fees that need to be paid to exit your existing loan, in addition to the costs of establishing the new loan and any fee charged by the broker.
Shop around online to compare products or use our multi-loan calculator. Research published by the independent consumer group CHOICE can also help you find the right product for your needs and budget - see www. If they aren't, they are operating illegally. While the store may be exempt, the actual credit provider must still be licensed. Anyone engaging in credit activities for example, by providing credit or assistance to you must give you either a credit guide with information such as their licence number, fees and details of your right to complain or a written notice with details of your right to complain about their activities.
Make sure you get a written agreement that states the type of loan being arranged for you, the amount, the term of the loan, the current interest rate, the repayments at the current rate, and any fees you have to pay. Never sign blank forms or leave details for the broker to fill in later. If you need the money by a certain date, ask the broker how realistic this is.
If it's not, work out a plan for how to manage this. If the broker agrees to secure funds by a certain date, make sure you have this in writing. If you feel like you're being pressured into signing something you're not sure about, take more time to think things through.
See our tips for resisting pressure selling. Keep your repayments up-to-date to avoid having to pay any penalty fees. Make extra payments when you can, to save on interest. Check for fees or charges if you're thinking of transferring your loan.
Act quickly if you're having trouble making repayments. It may be difficult to face the problem, but ignoring it will only make things worse. If you can't make the full repayment, pay what you can. Contact your credit provider without delay. If you are experiencing financial difficulties, you have the right to apply to the credit provider for a hardship variation.
If the credit provider refuses, you can complain to its independent dispute resolution scheme for a variation on the grounds of hardship see step 6 below.
There are places you can go for help - visit www. See our factsheet Can't pay your debts? Try to resolve your problem with your credit provider first. If you aren't satisfied, take your complaint to your provider's independent dispute resolution scheme.
Both schemes can be reached by calling If you think that a credit provider has acted unlawfully or in a misleading way, you can complain to ASIC online at www.