Are Investors Prioritizing Speed Over Rate?

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9mo

I know my clients like speed and certainty along with limited to no red tape long application process's that get turned over to an underwriter that keeps pinging for more info.  U know the hassle factor.

When I was at BP con talked to one guy and he was only interested in rates and points period.. " I just talk to 10 lenders and have them compete for my business"  Not my kind of client. 

there is a ton more to borrower lender relationships than just pricing.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9mo

    I know my clients like speed and certainty along with limited to no red tape long application process's that get turned over to an underwriter that keeps pinging for more info.  U know the hassle factor.

    When I was at BP con talked to one guy and he was only interested in rates and points period.. " I just talk to 10 lenders and have them compete for my business"  Not my kind of client. 

    there is a ton more to borrower lender relationships than just pricing.

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    • Mike GrudzienPro Member
      Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
      9mo
      Quote from @Jay Hinrichs:

      I know my clients like speed and certainty along with limited to no red tape long application process's that get turned over to an underwriter that keeps pinging for more info.  U know the hassle factor.

      When I was at BP con talked to one guy and he was only interested in rates and points period.. " I just talk to 10 lenders and have them compete for my business"  Not my kind of client. 

      there is a ton more to borrower lender relationships than just pricing.


       Spot on advice!  I concur.

      1Reply
    • Chris SeveneyBusiness Member
      Moderator
      Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
      9mo

      @Jay Hinrichs - cannot agree more. We have one borrower who would only come to us for a very hairy deals and wanted screaming low rates. He would not give us the slamdunks so we just stopped doing business with them because they were too much of a headache, and trying to negotiate every single fee, including third-party fees, such as appraisals 

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  • Jeff S.
    Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
    9mo

    “Feels like more investors value certainty and speed over headline rates lately.”

    This has always been true for knowledgeable borrowers. Bottom feeders aside, and who needs them, you will be out of business quickly if all you do is compete on price. Ask Kmart and Sears how that worked out.

    One of the real advantages of private lending is the freedom to develop unique loan criteria. This means establishing robust competitive advantages beyond just rates and points, combined with a laser focus on your borrower relationships.

    Likewise, if a borrower’s deal only works with a half-percent lower rate, it is not really a deal.

    2Reply
  • Timothy Hero
    Lender · United States · Member since 2020 · 1k+ posts · 499 votes
    9mo

    Rates will always be the main focus. Investors say speed is, but tell them another lender takes an extra 5 days to close, but the rate is 45 bps lower, and watch them be ok with waiting the extra 5 days.

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