You probably think that the purpose of the pricing agreement is to protect you from the borrower who refuses to pay your commission at closing. This happens occasionally, but not very often. Until most commercial mortgages are ready, most borrowers are exhausted, impatient and eager to close the deal. The borrower does not want to take the risk of starting the four-month application process again by presenting himself dishonourably to the lender. A brokerage pricing agreement is a necessity for both parties. It can inspire confidence on your side while making sure the broker will not hesitate to work for the best result. You might get the impression that the utility of an agreement is heavily focused on the broker. In reality, you will also get considerable benefits. An agreement signed between you and a broker protects both parties.
It includes details of financing, compensation awarded to the broker at closing and all fees paid to the lender. On the broker`s side, the agreement offers an essential non-circumvention clause that prevents you from bypassing the broker and going directly to a lender as soon as an offer has been made. Some buyers may hesitate at this point. After all, a mortgage is not yet guaranteed, so why is the money already under discussion? Excuse me, but these are not family credits of 1 to 4 family, personal, family or domestic credits. Industrial loans are not subject to the scheme. There is no legal right of retraction. If you cancel a commercial mortgage, in many cases you will still be indebted to your commercial real estate broker. Mortgage professionals and brokers alike can spend countless hours and sometimes weeks securing a commercial mortgage. If you work with a broker, they become your representative in the application process. You will actively seek the most competitive mortgage offers with the best interest rates and conditions. If you are looking for an unconventional mortgage or if you do not have the strongest line of credit, then a broker may find options that would not otherwise be available to you.
Working with a mortgage broker is one of the fastest, most efficient and affordable ways to secure commercial financing. A broker will work on your behalf to find competitive interest rates with lenders that you may not have access to in the public market. Your financing program is tailored to your needs, which gives you better terms than a large lender. If you consider that a broker is not paid until a mortgage is taken out, they need protection and security. Simply put, an agreement ensures that a broker can do his job without worrying about borrowers leaving the employment relationship. You`ll also quickly learn that commercial mortgage borrowers don`t appreciate the value of your time. They will work for hours and hours… and cancel without reasonable legal cause on you. Your attitude is: “Everyone knows that you don`t owe your mortgage broker a fee unless the deal is done.” In the following sections, we look at what a mortgage costing contract entails, what its purpose is and why you need it.