The Top 4 Commercial Property Mortgage Broker Mistakes
- Date: 2006-12-28 - Word Count: 573
Share This!
Why would you want to know the top 4 Commercial Mortgage Broker mistakes? Because it can cost you! Being a Commercial Mortgage Broker can be a fulfilling and lucrative career choice. You have the opportunity to be involved in some of the most interesting real estate projects...while you're getting paid.
But you need to be careful. Some brokers make mistakes that can cost them money…lots of money. Here are the top 4 Commercial Mortgage Broker mistakes.
#1 - Use Too Many Lenders
Some Brokers try to do everything for everybody. You need a condo conversion in New York? No problem! You need to buy 200-unit apartment building in Dallas? No problem! You need to develop a hotel in Atlanta? No problem. The problem with this is that for each of those examples you will need a different type of commercial lender. I used to try and do it all but not anymore. Having a niche, target market is the best way to go. You learn the ins & outs of your market. You know who the key players are and you're able to form better relationships with your lenders. How can you have strong relationships with 100s of lenders? You can't. Take your time to learn your niche market & lender before moving on to another market.
#2 - Don't Know Their Lenders' Programs
Another common Commercial Mortgage Broker mistake is not knowing all the details of their lender's program that they are promoting. Why? This cuts down on your pre-screening of clients. If you don't know what your lender can do, then you will spend a lot of time going back and forth answering questions to your lender. Only, later to find out that your lender can't do that type of commercial loan. What a waste of your time and your client's time. Time is money!
#3 - Not Having A Signed Fee Agreement
How would you like to spend 40 hours on a project for your client and help them obtain the financing they need. All for free! Out of the kindness of your heart! I wouldn't! Working for free to doesn't pay our bills. Let's face it, you're providing a needed and valuable service to your clients and you should be compensated just like any professional. You need to discuss your fees in the beginning with your potential client. They need to understand the services you are providing, how much you charge and when you will be compensated. These are covered in fully with a fee agreement. A fee agreement is a binding contract. It protects you and your client. Your client is protected from unknown or exorbitant fees. You're protected from being stiffed at the closing table.
#4 - Don't Know How To Effectively Pre-Screen Clients
Every Broker should know how to evaluate a potential client and their project…quickly. Within a 30-minute phone call, I know if a person is a potential client or not. I have a questionnaire that I use to pre-screen. I know if the commercial loan is something I can do, I know if the person is serious or just shopping and I know how long the process will take. Some Brokers can spend hours just getting to know the client and project, only to realize the client isn't serious…they aren't ready to make a decision. That is valuable time that you could have spent with a client that was serious and ready to move forward. Learn to guard your time wisely and avoid these common Commercial Mortgage Broker mistakes.
But you need to be careful. Some brokers make mistakes that can cost them money…lots of money. Here are the top 4 Commercial Mortgage Broker mistakes.
#1 - Use Too Many Lenders
Some Brokers try to do everything for everybody. You need a condo conversion in New York? No problem! You need to buy 200-unit apartment building in Dallas? No problem! You need to develop a hotel in Atlanta? No problem. The problem with this is that for each of those examples you will need a different type of commercial lender. I used to try and do it all but not anymore. Having a niche, target market is the best way to go. You learn the ins & outs of your market. You know who the key players are and you're able to form better relationships with your lenders. How can you have strong relationships with 100s of lenders? You can't. Take your time to learn your niche market & lender before moving on to another market.
#2 - Don't Know Their Lenders' Programs
Another common Commercial Mortgage Broker mistake is not knowing all the details of their lender's program that they are promoting. Why? This cuts down on your pre-screening of clients. If you don't know what your lender can do, then you will spend a lot of time going back and forth answering questions to your lender. Only, later to find out that your lender can't do that type of commercial loan. What a waste of your time and your client's time. Time is money!
#3 - Not Having A Signed Fee Agreement
How would you like to spend 40 hours on a project for your client and help them obtain the financing they need. All for free! Out of the kindness of your heart! I wouldn't! Working for free to doesn't pay our bills. Let's face it, you're providing a needed and valuable service to your clients and you should be compensated just like any professional. You need to discuss your fees in the beginning with your potential client. They need to understand the services you are providing, how much you charge and when you will be compensated. These are covered in fully with a fee agreement. A fee agreement is a binding contract. It protects you and your client. Your client is protected from unknown or exorbitant fees. You're protected from being stiffed at the closing table.
#4 - Don't Know How To Effectively Pre-Screen Clients
Every Broker should know how to evaluate a potential client and their project…quickly. Within a 30-minute phone call, I know if a person is a potential client or not. I have a questionnaire that I use to pre-screen. I know if the commercial loan is something I can do, I know if the person is serious or just shopping and I know how long the process will take. Some Brokers can spend hours just getting to know the client and project, only to realize the client isn't serious…they aren't ready to make a decision. That is valuable time that you could have spent with a client that was serious and ready to move forward. Learn to guard your time wisely and avoid these common Commercial Mortgage Broker mistakes.
Related Tags: commercial mortgage broker, commercial property, commercial lenders, fee agreements
Visit http://www.all-about-commercial-mortgages.com to learn more about commercial properties and financing of commercial properties. Educate yourself before buying that commercial property!
Patti Porter is a Commercial Mortgage Broker specializing in income producing properties and training in Commercial Financing.
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- 5 Reasons to Buy Jasper Real Estate
Jasper is a small town in North Georgia and it is growing rapidly. Since North Georgia Foreclosures - Ellijay Real Estate
Ellijay Georgia has always been known for it's outdoor activities and seasonal festivals. Downtown E - How to Deal With Blocked Drains
A blocked drain is an occurrence that happens eventually to all households. You may have experienced - The Benefits of Hiring a Plumbing Consultant
Your dream home may not always be brand new, with fresh paint and home essentials. There are certain - The Worst Mistake You Can Make When You Apply to Rent a Home
A whole new class of people has become renters and potential renters in America during the last thre - State of Individual Real Estate Markets
Everybody is well aware of the hit that the real estate market has taken over the past three years. - Thoughts on Avoiding the Landlord Trap
I've heard several people say they would never invest in a multifamily rental property because they - An Idea to Increase the Bottom Line of Your Investment Property
Are you pretty sure that you've already maximized the income coming from your property? If you've cl - Finding the Value of a Piece of Investment Real Estate
There is a lot of confusion about how much investment property is really worth. We'll look at three - Arkansas Land For Sale - Search Engine Optimization and Your Website
If you have Arkansas land for sale and are interested in advertising it on your website I have a few
Most viewed articles in this category:
- How High Did Home Prices Really Go
The U.S. Census Bureau released data on Tuesday that revealed where the nation's hottest markets wer - New Homeowners Tips for Household Safety
With so many items on their ¡°buying a home¡± checklist, few homeowners take into considerati - Truth About VA Foreclosures
Many people now days are finding themselves out of work and not being able to make the mortgage paym - Avoid Rookie Real Estate Investing Mistakes
When Robert Kiyosaki, author of the Rich Dad book series, bought his first property he was, of cours - Finding The Perfect Roommate On Craigslist
Craigslist, Roommates, and The Concerns Craigslist is "great" when it comes to looking for housing - The Forgotten Secret To Selling Property - Simple, Quick And Cheap
Why spend big dollars trying to get people to drive a long way to see your house, when your best pro - Get Amazing Results Selling Real Estate Online
This is the age of the internet. Why not take advantage of the widespread use of the internet to ad - Dallas Real Estate Information
In the United States, Dallas is considered as the second leading state according to the area. If any - The Largest Private Equity Indian Real Estate Deal
In the largest private equity deal won by the real estate sector, Morgan Stanley Real Estate has inv - Fractional Real Estate Ownership
Fractional ownership of vacation ski condos is growing in popularity. Park City Utah a popular ski t