The Top 4 Commercial Property Mortgage Broker Mistakes


by Patti Porter - 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.

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.

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