Seek first to Understand
Clearly establish your client’s needs. Ask them what they want and need. Fully understand their situation. It’s your job to understand what they can pay, what the land is worth, what their minimum needs are and what their wants are. You should have a relatively intimate knowledge of what rates the borrower can afford to pay. This understanding should be completely based in fact, you should be asking “what is their monthly income, how will this loan actually affect their ability to earn, and how they plan to pay the loan back.
If you properly understand your customer’s needs, you can give them what they are looking for. As a lender, it is refreshing to see brokers who know the property. Too often, we get a copy and paste brokers who obviously haven’t done any homework. Our attitude towards a loan matches both the broker’s credibility from past deals and how informed the broker appears to be. The more corroborating information (financials with bank statements, tax returns and so forth) that a broker can bring to the table means that we can move forward without having to constantly fight for information.
Establish realistic expectations.
After doing your homework you need to set realistic expectations for both borrowers and the lender. The borrower should know what rates they should be ready to expect. These expectations include what upfront fees they may be looking for, what rates to expect, and their need for an exit strategy.
The lender needs to know the maximum or minimum amount of money required to complete a project. In addition, the borrower needs to understand the legitimate exit plan and intentions of the borrower. The more information you provide the more credibility you receive. Don’t lie for your borrower it is likely to ultimately prevent any deal from happening. Being an honest broker will pay dividends for you and your clients.
Be the MVP of the Deal.
Your connections and personal relationships developed will be what makes you special. But your communication should be what gets you there. Brining connections, clear communication, and understanding of all parties need all combined can help make you the MVP of the loan. Becoming the glue that holds everything together will prove your worth to everyone involved. Both the borrower and the lender should leave the loan thinking you earned your broker points.
Negotiate a loan that benefits all parties involved
People like to win. Your borrower, the lender and you all want to walk out winning. A truly successful deal will make everyone happy. Seeking understanding, Balancing expectations, and being the MVP of the loan will allow you to create a brand and reputation that will drive future profitability for you as a broker.