Jump on the bandwagonAnthony Gramzacommercial lending, networking and co-brokerage
To jump on the bandwagon, according to Mr. Webster, is to
support a cause that seems assured of success. The cause that I
have been promoting for many years, both in articles published by
The Mortgage Press and other trade magazines, is education
of the commercial mortgage brokerage side of our industry.
As an approved national instructor for the National Association of Mortgage
Brokers, I travel all over the country to teach classes on the
basics of commercial loan brokering. I also bring to the classes my
16 years of experience in the field and, as they say in this
business, my years in the trenches. The majority of attendees are
currently mortgage brokers and agents involved in the residential
side of our industry. Some of the attendees take the classes only
to obtain their necessary credits for continuing education and
licensing. Others, however, do have an interest in commercial
brokering, but they have some real reservations about jumping into
the well. And a small portion will dedicate a greater degree of
time and effort to make deals happen.
Without continuing education, you become stale. Furthermore, you
rely and hope for the best in only one segment of our industry.
This raises many questions. What do I do when the residential side
of this industry moves to the snail pace? What happens when the
refi business is completed? What happens when the interest rates
move up the scale, causing typical homebuyers to hold and wait? Am
I prepared today to move into commercial? Am I to rely on other
brokers to take the commercial business from me? Do I say no to the
client that is seeking a commercial loan on that small or large
project in the territory I operate in? An examination of your
business practices may be long overdue. If you intend to make our
industry your true career, then you need to open the window of
opportunity, and that means further education to enhance those
I just returned from teaching both the basic and advanced NAMB
commercial loan brokering classes for the Florida Association of Mortgage
Brokers. In addition, we presented a four-hour seminar on
international financing. Over the three days, attendance exceeded
386, and in attendance were both experienced brokers who had
successfully completed commercial transactions and some who were
not as experienced yet. But guess what? It didn't matter. Both
groups learned something new. Those with some experience sharpened
their skills, and the inexperienced brokers and agents found
themselves saying, "It's not as difficult as I thought!"
The enthusiasm was great, and much credit and accolades go to
the Florida brokers themselves, as well as FAMB Executive Director
Karen Wordell-Smith and her staff of professionals who made this
educational conference a real success. Our wish is that our other
state partners will follow suit.
If you are currently doing some commercial loan brokering, then
you know that the marketplace is very active, with more available
commercial mortgage funds than deals. What is especially surprising
is the interest rate scenario that we have had for the past three
or four years. The rates, terms and conditions have been extremely
favorable to the investors in the marketplace and many have taken
advantage of these offers, but we still find many investors sitting
on the sidelines. What they are waiting for? We have no idea.
Our crystal ball seems to indicate a continuation of these rate
and terms, and hopefully the words of wisdom from the soothsayers
of the Far East will remain true. For example, a recently placed
loan for $1.5 million on a funeral home in the south at 5.75
percent fixed for the first two years, with a conversion to a fixed
five-year term over a 20-year amortization at the five-year
Treasury rate plus 325 basis points. How about a conversion of a
seven-story office/warehouse complex into a flag hotel with a
construction loan at prime plus one percent, converted into a
10-year fixed at 6.5 percent and a 25-year amortization schedule?
Or get this one - a major shopping place, with major AAA tenants at
a rate of 0.78 basis points over the 10-year Treasury! At today's
published rate, the loan would close at a walloping 5.08 percent!
Are you taking advantage of this marketplace? If not, you
Lastly, if you still do not feel that this side of our industry
is for you, then, as I always stress to our fellow brokers, at
least get the basics and get to know some of your fellow brokers
who do commercial loan brokering in your state. Networking and
co-brokerage play an important part of my business, and can be
profitable for yours as well. Don't let that commercial client walk
out of your office, for when you do, the commission dollars walk
also. Take advantage of the educational opportunities offered by
your association, and if your state chapter is not offering the
NAMB-sponsored commercial classes, then you need to ask why not.
You are the association, and you deserve it.
Let me close with this short reminder from our industry
preamble: "As a member of the National Association of Mortgage
Brokers, we have demonstrated a firm commitment to remaining an
informed professional in the rapidly changing world of real estate
finance. This dedication, which includes adherence to a precise
Code of Ethics and Standards of Professional Practice, results in
our customer being represented by honest, educated and sincere
Have a great day, and success in your next commercial brokering
Anthony Gramza is president of Rochester, N.Y.-based AMG Commercial Mortgage
Group. He may be reached at (585) 264-9540 or e-mail firstname.lastname@example.org.