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Filling the refi void: Small commercial originations provide competitive advantage in shrinking market

National Mortgage Professional
Oct 20, 2005

Commercial loan brokering ... why the mystery ?Anthony M. Gramzacommercial loan brokering, education, NAMB As we sit in our offices whether we are residential or commercial mortgage brokers amazed by the financial marketplace and the amount of business that we have generated over the past several years, we should all be wondering the same thing: When are these attractive rates going to make their leap upward? And once they do, how will we prepare ourselves to counter the resistance of buyers to buy, and sellers to become somewhat more realistic in their real estate pricing? With times changing, we need to prepare ourselves for the inevitable fact that we must begin to earn a living. We are, in most cases, paid on a commission basis, and since many of us have enjoyed the spoils in the residential marketplace, should we consider setting our visions to commercial loan brokering? The answer in my humble opinion is yes! Many brokers in this industry have stayed away from commercial loans for varying reasons: they are foreign to them; they don't understand the nomenclature; they have been spoiled on the fast payments of commissions on the residential side; or they have heard of the time-frame from application to closing or of the horror stories of unworthy clients and brokers losing their commissions & whichever the reason, they have become completely turned off. The natural question that needs to be posed is, how do we overcome? Ladies and gentlemen, the answer is education. What better way is there to become educated than through the offerings and services of your local National Association of Mortgage Brokers state affiliate's Educational Committee. Many good courses are currently being offered, and NAMB has made many instructors available to its state affiliates. In most cases, the cost is nominal, and the little that you spend will bring back the investment threefold. Talk to your fellow brokers, and learn more how commercial loan brokering can become a financial reward and, more importantly, how it can become the new source of revenue when the residential well dries up. It's no mystery, it can and it will happen. Are you prepared? The business of doing commercial loan brokering has not changed in the past 50 years. It is still a people business, a face-to-face transaction, and a three-party system between the commercial mortgage broker, the client and the lender, which should and, in most cases, will end up being a profit center for all. For all the many years that I have been associated with NAMB as a commercial mortgage broker, I am still amazed at the lack of interest on the part of many of our members to learn more about commercial loan brokering. I still say, as I have preached so much in the past ... it's no mystery. If the choice is not to enter this side of our industry, so be it. However, why would you let potential commission dollars slip through your fingers? At the very least, use your knowledge to listen to a potential client, get the basics and then refer them to another broker who is willing to take over the responsibility and place it with an interested lender. A referral fee or a portion of the potential commission is better than nothing. Yet, our members continue to let the dollars roll out of their doors because the attitude is "We don't do commercial deals!" I have been teaching commercial loan brokering classes for the past 10 years, five of them as a member of NAMB. Of all the members who have taken NAMB-certified commercial brokering courses, I often wonder how many have still not ventured over to this side of our industry. I'm afraid to say that probably too many have decided that commercial loan brokering was not for them, and instead of utilizing some basic knowledge, they have allowed the knowledge gained in those previous classes to fade away. For those who have elected to take the challenge, who have taken our advice and are willing to struggle to help a client get the proper funding needed for their business, I applaud you! You are the winners; you are the folks who know that commercial loan brokering is not a mystery. Life's challenges and battles do not always go to the stronger or faster person, but sooner or later, the person who wins is the person who believes they will. You have heard it many times over, and yet, we cannot help but to repeat it againif you think you will lose, you are lost; but if you maintain a positive attitude without losing hope, you will win. Furthermore, if you join the fraternity of commercial loan brokers, you will have supporters who will help you win ... and for sure, you will realize that commercial loan brokering is no mystery! Anthony M. Gramza is president of Rochester, N.Y.-based AMG Commercial Mortgage Group Inc. He may be reached by phone at (585) 264-9540 or e-mail [email protected]
Published
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