The Mortgage Press is pleased to present "The Commercial Corner," a monthly column by Mike Boggiano of Silver Hill Financial LLC dedicated to answering your questions about the commercial mortgage marketplace. If you have a question that you would like answered in a future installment of "The Commercial Corner," please e-mail [email protected].
After several record years of refinance business, many residential brokers find themselves in the same spot - looking to replace the income from a once-sizzling sector of business. This month's column - a positive twist on common mistakes - may be just the information you need to take your business to the next level.
Q: I'm a residential broker whose business has begun to
level off, and I need to do something different to keep it
thriving. Do you have any suggestions?
A: There are numerous business tactics that salespeople can apply to re-energize their businesses. Based on the current landscape in the marketplace, it's a good time to examine new ways to diversify. Here are the top five suggestions for a residential mortgage broker facing a challenging environment - things you can do right.
Studies have shown that borrowers feel that brokers offering residential and commercial products are more credible and more professional than those offering residential loans only. With new programs in the marketplace that aim to simplify the lending process, the commercial field (particularly the small-balance category for loans up to $1 million) is not as daunting as it may have once seemed. Explore what's available and you might be surprised. The added benefit of going commercial is that when deals are done properly with the right lender, they can make you more money with fewer closings.
By offering small-balance commercial products in addition to the residential lineup you already know, you will be viewed as a resource for a wider range of people and have an advantage over the competition. Look for a small-balance commercial program that makes the transition easy for youone with underwriting guidelines similar to residential, a familiar process and training and marketing tools. Also, ask about program features that help you attract borrowers in a rising interest rate environment, such as interest-only, declining fixed rate programs and other unique features that benefit you and your borrowers in a competitive market.
Become an expert and an advisor by educating yourself
about the lenders and programs available
Be more than just a broker to your customers. Position yourself as an expert advisor who can present all of the available or appropriate options for their financing needs. Experts speak at professional events, author articles and align themselves with influential referral partners. Advisors help customers make educated decisions by presenting and offering an array of options to fit their needs. They also point out opportunities to build equity and make smart financing decisions. For example, you might create a newsletter that presents pertinent information to customers through short articles and news briefs, or you could team up with another professional in your circle to provide a guest column in their newsletter. Seek out opportunities to be an expert and an advisor, and become a one-stop resource for borrowers.
Develop a system for understanding your borrower's
Review your existing files for clients who already own commercial properties. Think about deals that you have previously turned away or referred somewhere else because you did not offer the appropriate product. Ask a consistent list of questions when you sit down with a borrower. Always include an inquiry about other types of financing needs in addition to the deal at hand. Identify at least five lenders that provide different niche programs in order to fully service your client and sustain the relationship.
Do this not only to meet or connect with prospective borrowers, but also to learn more about what's available in the marketplace. Innovative lenders have developed programs that provide profitable alternatives to many of the issues youre facing. Learn about other lenders and the products available by attending trade shows and events sponsored by industry associations.
For prospecting, consider attending small-business networking events to meet new borrowers. Expand your referral network to include contacts that specialize in commercial transactions, such as real estate agents, CPAs, attorneys, title companies and more. With innovative programs in the small-balance commercial marketplace, this is a good time for small-business owners to investigate purchasing office or warehouse space as opposed to continuing to rent or lease. Reach out to small-business owners and investors for commercial lending opportunities.
Engage in marketing or tweak your existing marketing
Create one-page flyers that advertise your business and what you offer. Send postcards or letters, do some cold calling and place advertising in local business publications. Expand your business by offering both commercial and residential loans and add this information (or information about other products you offer) to all of your marketing materials. Also, dont forget to include these products on your Web site, business cards, e-mail signature block and telephone hold messages.