Commercial Mortgage and Loan Brokers – Three Levels of Service

I have found that commercial mortgage brokers offer one of three levels of service.

1. Basic Service - Connect borrower with lender who may be interested in

loan type. Preliminary criteria match and pass along documents provided

by borrower

2.Mid Level Service – Extensive criteria match of borrowers and lenders,

review borrower provided documents, advise borrower on documents

needed, provide form for loan executive summary

3. Full Service Brokerage – Conduct search to find “perfect” match for

borrower / lender, advise borrower on loan and or equity alternatives,

perform full review of borrower financial situation to provide quality

strategic advice, write executive summary, address all problems with

detailed explanations, obtain all borrower documents necessary for a

complete package

The interesting thing is that even the broker providing the bare minimum basics believes he’s providing “full” service and that he deserves the “maximum” in compensation.

We work with brokers extensively as 80% + percent of our loans are brought to us by mortgage brokers. I find only maybe 10% provide “full” service; with the others we have to continually request documents, receive documents that the broker has never reviewed or even looked at, he just “passes them on”, has trouble relaying the loan terms to his borrower although we clearly spell out the terms in either our Loan Proposal or our Term Sheet, and can’t even fully fill out our simple 1 and 1/2 page Loan Information Request Form because he doesn’t want to waste his time in case we won’t fund the loan.

If you’re a borrower and have a broker that qualifies as “Full Service” treat him well because he’ll find the right loan for you in almost any situation.

If your broker is “Basic Service” you might as well contact the lenders yourself and do your own research on lenders criteria. If he’s “Mid Level” than work with him to see if you can move him up a notch. Believe me, it’s much easier for us to make a loan to a borrower represented by “Full Service Broker” than either Basic or Mid Level.