Brokers Working In the Spirit of Cooperation- Broker Etiquette

The last two years of the banking debacle has had an unfortunate result for commercial developers. Anyone in the industry knows that very few commercial loans were actually funded in 2007 and 2008. This is a time when institutional banks hemmed and hawed, changed their guidelines and sat on top of loans that they never funded. The truth is that they did not have the liquidity to perform but just did not have the courage to turn away business for fear of losing depositors.

The only loans that closed were those that were being submitted to the private bankers and asset managers. We know this to be true because our company, has always worked exclusively in this space: private equity and asset based lending. Now that the commercial world has come to the awakening that their main street bank is not going to loan them any funds for their project, they are crossing over to the private money world to get back on their feet.

Out of their desperation, the developers may have contacted multiple brokers (who have no connections in the private money world), and eventually find a performing funder. By the time the loan gets to our desk, it looks like this: Joe referred it to Bob, who referred it to Jane and Jane presented the project to us. We are direct to the private money. Now we have a daisy chain of 3 brokers, all expecting to make 2 points for "funding the loan", and the developer is nervous because Joe tells him he's going to have to charge him 8 points...to include 2 points for everyone, including us.

This is where we step in and give everyone a reality check. No one in the chain is entitled to anything other than a referral fee. The only broker entitled to a commission, by law, is the procuring broker. That woud be us. Of course, there is always diplomacy in distributing the commission. We don't have to wave the law into the other broker's faces, but we always clearly explain that we need to work in the spirit of cooperation and the service agreement the borrower signed is void because they didn't actually provide the funding source, they merely referred him to the source.

It works both ways, there are times when we co-broker and take a referral fee from another broker. In this market it's all about working in the spirit of cooperation with other brokers and developers and just getting the project funded. We are direct to 10 private funding sources, but use several others, always putting the client first.

Brian Walker President and CEO Walker Commercial Funding Please visit our website for more information on our programs and services http://www.walkercf.com brian@walkercf.com (281) 877-8440 Skype: brian.walker7 Walker Commercial Funding speaks 8 languages and funds world-wide! Feel free to contact Brian Walker with any questions you may have.

Brian Walker, President and CEO of Walker Commercial Funding