Property Investment Referrals


Summary

In order to ensure the best possible consumer outcomes and reduce any potential conflicts of interest, the Loan Market Group (LM) has clear guidelines on its requirements in relation to property investment. 

This policy applies to brokers who refer their customers to property investment groups, property marketers, real estate agents or similar groups. In such a case, this policy must be strictly adhered to. 

Any non-adherence with this policy may cause LM to terminate the Agreement with the relevant broker. 

Guidelines

Brokers must NOT

  • provide advice in relation to the selection of specific property (this also inhibits acting as a buyer’s agent); 
  • receive a referral fee or similar financial benefit for the referral of a buyer to any real estate or property investment group; 
  • also act as a real estate salesperson / buyer’s agent. The role of a broker and real estate salesperson / buyer’s agent must be performed by separate people; 
  • disadvantage their customers in order to receive a commission/ referral fee or other benefit as per the Conflict Priority Rule; 
  • mislead or deceive their customers; 
  • provide any property advice, including making representations as to which property or area their customers should consider; or 
  • use the Loan Market brand to promote a seminar or service nor permit any use, or association, or any potential endorsement, of any third parties by Loan Market, Ray White or the White family. 

What a broker may do 

Brokers may: 

  • provide general property advice related to budgeting, savings, affordability and debt structuring; and
  • employ a broker and a properly qualified and licensed real estate agent / buyer’s agent, as long as they are not the same person. The roles of each person must be separate and all property recommendations must be made by a licensed real estate agent / buyer’s agent or their properly accredited representatives. 

When a mortgage broker does refer a customer 

If a broker chooses to introduce their customers to a property investment group, then they must: 

  • undertake proper enquiries as to the appropriateness of the business and/ or individual; 
  • maintain a register of all customer introductions; 
  • make that register available for inspection by LM at reasonable notice;   
  • provide a written recommendation that the customer get an independent valuation and provide a written copy of any independent property valuation to the customer; 
  • have the customer sign a statement that LM does not make any warranty or representation of an investment property; 
  • provide a written statement approved by Loan Market about the implications of cross collateralising property securities in order to obtain finance; 
  • notify their professional indemnity insurer that they are involved in this type of business; and 
  • indemnify LM from any claims or actions from customers arising from the recommendations made (this is contained within the Agreement).


If you have any questions, please contact compliance@loanmarket.com.au