How To Close More Commercial Loans
Best Practices / Suggestions to Close More CRE Loans
Over 20 years we’ve learned what it takes to build and manage a large referral network in the CRE environment. With quarterly surveys and feedback from different segments regularly we have built a “success platform” that while not guaranteeing you’ll close every loan certainly increases your chances many fold.
Here are some tips and strategies we impart to help you increase deal flow and closing ratio.
1) ABOVE ALL – Make Yourself Accessible – #1 Complaint by Borrowers and Referring Parties is that brokers use CID too much to screen calls. Answer the phone and you’re a step ahead of the competition at the outset.
2) Don’t Over Qualify on 1st Call – Borrowers Complain that when a broker calls they “put them through the ringer” before focusing on what the borrower needs and or has previously experienced. You Have 2 Ears and 1 Mouth – Listen Twice As Much As You Talk !
3) Make It Easy To Engage With You – Don’t ask for intrusive docs up front. Get the items you need to do an initial evaluation (Rent Roll, P&L , Mortgage Statement). You don’t need to pull credit, see tax docs and bank statements before you evaluate the deal itself. This only turns them away because no trust has been established yet.
4) Be Responsive – Referring Parties (Realtors, CPAs / Asset Managers, Title Reps) and Their Borrower Clients want a response when they email or call.
If you stall or are lazy in your response time they’ll go elsewhere feeling like their deal isn’t important to you.
5) Be Prepared – Have an email template prepared with your bio and loan products included to send upon first contact. You know… What We Can Do For You type communication. When you write on the fly there is a greater chance of misspellings, grammatical mistakes and or missing information. Read Before Hitting Send.
6) Never Consider A Declined Loan to be A “Lost Deal” – Every Commercial Borrower is a Potential Deal at some point. If the current deal doesn’t work out make sure you find out what other properties they own or are considering acquiring and STAY IN TOUCH REGULARLY!You might also be able to turn the decline into a mod / workout opportunity if you think 4th dimensionally.
7) Be Professional In All Communications – Don’t speak or write to borrowers using slang or names like “Pal, Buddy, Sport, Dude” etc… as if they are your lifelong friend from the neighborhood. They may laugh on the phone when you do so but deep down they will not feel like they’re dealing with a pro. This leads to lower fees / commissions and worst of all a comfort in stalling or not following through with you. Be polite by using “Good Morning” “Sincerely” etc… in your written communications. Someone looking for a 1m + loan isn’t going to feel comfortable doing the deal with a broker who writes “what’s up dude” or “Hey Pal”.
8) Broaden Your Horizon – There are no regulations preventing you from closing CRE loans in any state other than AZ which requires out of state brokers to have in state licensing. Thus you can do deals in all others. Some states have “exemptions” to the law like CA or FL but you can do CRE Loans / Mods as long as the property is commercial (4 units or greater for apts) and in Florida as long as it’s a non-residential loan where the borrower is an “Institutional Investor” Don’t restrict your chances for success because you want to take people to lunch and feel important. Email, PDF, Fax and Skype work fine if you conduct yourself professionally.
9) Build Relationships – Borrowers, Realtors, Title Reps and others can send business your way but you’ll need to work hard to earn their trust. They are and consider themselves to be professionals.They don’t blog, tweet or Facebook unless it has a specific business purpose. Help them solve problems and not always for money. Credit, Evaluation and Finance issues come up all the time that you may be able to help with gratis. Attend Realtor and other trade shows (on a national level if possible) to build your personal network. You won’t know what to do with all the referrals later.
10) Under Promise and Don’t Cut Corners – Borrowers and CRE professionals often complain brokers will “say anything” to get the deal but then fall short of initial claims. Worse they state in a recent survey that they feel they need to review any docs prepared with extra attention to make sure nothing was fudged, left out or done in a jury rigged manner as brokers have established a reputation of doing the past.
11) Until First Contact – We recommend using *67 (when you dial type *67 then the number) which will make your CID show “out of area” and call only 1 time in the am and 1 time in the later afternoon their time until you have that handshake conversation. Reason being…. You don’t want them to judge you before you get a chance to chat based on what they see on their CID and folks do that.
12) Don’t Leave Messages – Not until you’ve had that first conversation. These are mostly self made millionaires. Their phones are always blowing up. Contractors, vendors ect… leaving messages. You don’t want to be another long message stuck in the middle of many others.
Some folks are upset when reading this doc regarding some items such as the *67 strategy.
Keep in mind.…These tips are based on quarterly surveys with CRE property owners / borrowers, Realtors, Title Companies and others who are part of our network of over 480,000.
Bottom Line… Be Professional, Prepared and Responsive !
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