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Temp Discount to Mortgage Clients

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#1
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Shark on a Cash Reef
I have 2 specific mortgage broker s corps who have been great clients over the years and their business (I can clearly see) has literally dropped of a cliff. They are having trouble paying their own mortgages, etc, etc.

These clients fit right into my specialization too (smallish s corps).

Of course these things are cyclical and there will likely be a slew of refinances and loans as rates and other things stabilize, etc.

It's just a storm for them to weather and they should have put aside money from their recent heyday.

Do you ever offer discounted work for a year or so such as half price?

I feel like I should do it due to the value of the loyalty it builds (these are good clients) and also just to be nice (I'm the 3rd pig who build a house out of stone [I hope] and the wolf is approaching these clients fast).

Would you?
 

#2
smtcpa  
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Richmond, VA
No. I have in the past. And they burned me. During the last mortgage downturn in 2008, all of my mortgage broker clients closed shop and left me hanging.
 

#3
CathysTaxes  
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No. They may expect a permanent arrangement of discounted work.
Cathy
CathysTaxes
 

#4
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A Shark on a Cash Reef!
I don't discount anything. It sets an expectation and you will have a hard time escaping it. It is not your fault they failed to set aside cash during the stream of cash flow they had over the past 2.5 years. Same thing with realtors...they just do not plan ahead for when the market drops.
 

#5
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WA State
I generally offer flexible payment terms, but I won't discount fees.
~Captcook
 

#6
Eduardo  
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Midwest
Don't do it - that will just set the expectation that you'll discount fees, and when they refer someone to you, they'll likely know that you provide discounts and they'll expect it.
 

#7
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The Office
CaptCook wrote:I generally offer flexible payment terms, but I won't discount fees.


Same. During 2020 I modified payment terms for a few clients to mitigate cash flow burdens. I believe it built a tremendous amount of rapport and strengthened the relationship. Thankfully, no one stiffed me.

I would hesitate to discount fees. I generally view my clients as long-term external partners. If they're not able to manage cash flow and the business cycle, or have declining revenue for some other reason, I begin to question if we're a good fit.
 

#8
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Wisconsin
It's a bad idea to discount fees in this situation, as has already been said.

When I have clients whose income is tied to housing transactions, we have a very long talk about the positives and negatives of being an S corp. It's great when income is high, but it's incredibly costly when it's not. If they still choose to go down the S corp route, it's on them.
 


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