Home's Where The Mortgage Broker Is

The Age

Friday November 5, 2004

Janine Perrett

If you want to work from home, do your homework, writes Janine Perrett.

EVEN more than 20 years' experience as a management consultant didn't quite prepare Jennifer Schelbert for the harsh reality of running her own mortgage broker business from home. And even experience as a marketing manager didn't guarantee start-up success for the catchily named "Mrs Mortgage".

"I thought, if I put up my shingle and said, 'here I am', they would fall over themselves," she says. "I have to admit it's been a lot tougher than I expected - it's tough to make money."

And this coming from someone who spent most of her working life in the corporate world, advising others before deciding she wanted a career change - at age 55.

"Having been in the consulting industry gave me a bucketload of experience. I found the issue that most often come up was about the dollar; so I wanted something that would give me a chance to assist on financial matters."

One of her favourite clients was chairman of a large real estate company but he advised her against going into that business and suggested she become a mortgage broker.

"The best way to start is to join one of the large companies that take on rookies," Jennifer says, admitting that many of her application letters received no answer.

In the end she joined a two-week induction program with a big mortgage minimisation group and worked for them for almost a year before being head-hunted to open the Melbourne office of The Money Shop. When that general mortgage broker was taken over some months later she decided to set up as an independent home-based business.

"To go it alone you need a phone, computer, fax, email; luckily I was pretty well set up because I had been in business before."

Ever optimistic, she believes it should only take about 12 months to establish her business. Until then, she needs to overcome a few challenges - like explaining exactly what she does, for a start.

"A great problem for mortgage broking is that the general public doesn't really know what it is."

Basically, when property buyers wants to find the best deal, they call a mortgage broker to shop around for them. Brokers make their money on the commission they charge the mortgage provider. The problem is that, because virtually anyone can set up as a broker and the business is commission based, there are those who will tip you into the loan that suits their bank balance rather than yours.

"I'd like to see better government legislation," Jennifer Schelbert says emphatically. "There's not a lot, but there are some dodgy operators and I constantly get calls from people who have been given bad advice."

(She cites one risk for small businesses in "low-document loans", in which the borrower makes a statutory declaration estimating their future income. While these were designed to help businesses get a loan by forecasting their profits, it has also led to problems with the Tax Office when audits reveal a discrepancy between the bank documents and tax returns.)

Jennifer makes the necessary calls to check the quotes, which can be time consuming but she believes is part of the service.

One of her main challenges is the isolation of working from home. "It's the lack of feedback. If you work in a big office you have many senior people to help; but when you're on your own you have to ring and check with people like Choice. While that's fine and the result is the same, I miss the physical interaction with people.

"And, of course, there's no one to pat you on the back," she says with a good natured laugh.

Jennifer makes the effort to get out regularly and network with others in the industry. But that also requires an effort, as she discovered. "In Melbourne they like to network at breakfast; which means getting up early in the morning and driving into town."

Her work experience has been of benefit when it comes to the challenge of expanding her client base by marketing Mrs Mortgage. One idea she got from The Money Shop in Sydney was to write a weekly advice column in a local real estate newspaper.

"I've emerged as something of a Dorothy Dix for the mortgage industry," she jokes. "It hasn't brought me a lot of business so far but it is good exposure."

This has been more effective than her newspaper advertisement, which ran for eight weeks with no impact. She now uses handbills to advertise her service in neighbouring suburbs. "I use a delivery company, which costs about $1500; it's not cheap. The first one I had I suspect they were not actually hand delivering them. When I changed to this one I immediately started getting calls so knew they were hitting the mark."

One question she is now asking herself is whether she should buy a commercial "list bank" to help her find more clients and generate prospects.

"Australia Post did a lifestyle survey, a five-page questionnaire, and you can purchase that mailing list for $1500," she says.

While Mrs Mortgage is upbeat about her prospects, she finds one area particularly time consuming and frustrating - dealing with the major banks that are a key part of her business. "There is so much bureaucracy, I often feel like you're just a number and you can get sidelined," she says.

Janine Perrett's articles are compiled independently of the network.

CHALLENGES FOR JENNIFER SCHELBERT

* Lack of physical contact and feedback working from home

* Marketing home-based business

* Expanding client base

* Dubious competitors

* Dealing with major bank bureaucracy

QUESTION

* How do you overcome the isolation of working at home or in a micro-business?

© 2004 The Age

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