Commercial Mortgage Broker Fee Agreement 
 

It literally has never been more important to do this right.  Due to the "broken" commercial secondary market, very few lenders are willing or able to pay yield spread.  We have to get paid the old fashion way (When was the last time you talked to a SBA lender?  Market YSP is a pathetic .5%...). 

In addition, it has never been more important, to spell out exactly what your relationship is going to be with your borrower.  Do you want an exclusive relationship?  To be paid a retainer?  To have the borrower reimburse you for expenses incurred while packaging/shopping their loan?  Do you want to be paid, if you produce a bona fide commitment to fund, regardless if the borrower "passes" and goes with their local bank that they never mentioned to you?  A legitimate broker fee agreement goes way beyond just your 1% or 2% fee. 

Have you heard your lenders say to you "oh, we don't have formal agreements with brokers, but no worries, we'll pay you outside of close?    We look at a lot of deals and it would be just to cumbersome to make a separate agreement with each broker." (Click here for a fee agreement between the Broker and Lender)  Or how about this one "Why would we not pay you?  You're a valuable referral source and we want to keep you around for years to come."    

Commercial Mortgage Broker Fee Agreement
  

Or here's one I use to hear all the time from borrowers, after submitting a term sheet that fits exactly what they said they wanted and what I quoted (and I put 10 to 20 hours into the deal) "Oh, we know xyz bank...  not to be rude but why do we need you?"  Or how about "Jeff (me) we've known each other for years, I will pay you.  But, the last thing I want to do is get my attorney involved in reviewing or writing some kind of fee agreement.  It will cost me hundreds if not thousands of dollars.  Lets get this thing going first, find a real loan then we'll take care of you at the appropriate time.  Don't worry about it."

Bottom line, if you  haven't been screwed by either a borrower OR a lender, then you're probably not doing as many deals as you want.  If you're not protected you WILL get screwed, it is just a matter of time.  There aren't a lot of words more frustrating to hear than "well, what do you have in writing?"  After diligently working on a file for months, only to realize that you will not get paid or only get paid a percentage of what you were originally quoted.  Or have to take someone to court with weak documentation.  You have to have a legitimate commercial mortgage broker fee agreement signed and in hand. 

Fee Agreement for Commercial Mortgage Brokers

Believe me when I say that we have learned this lesson the hard way.  It has happened to us on multiple occasions where well known "reputable" banks simply changed what they said they would pay us on YSP.  Emails won't cut it either.  Or, borrowers will try to give you a sob story on why you'll have to wait or worse "what do you mean, I thought the bank pays you" (on deals where we had to get paid outside of close). 

You got to have it in writing or you are at their mercy. 

Quick story here, I had three loans in process with a very well known small balance lender.  We had done many transactions with this lender and became relaxed that this issue wouldn't come up.  We stopped formalizing our agreements with them based on the ongoing relationship.  Surprisingly, our Business Development Officer was fired and our files in process were given to another BDO that we did not know.  All three loans closed within one week of each other (oddly).  When we received our check it was 30% lower than what we originally agreed with the previous BDO.  When we called both the new BDO and his bosses, they all said "well, what do you have in writing".  And yes, we ate it... 

On some deals brokers are not "welcome" (by the bank) and we therefore have to be paid outside of close.  If you depend on the borrowers integrity alone to pay you, you'll have some frustrating stories to tell.      

We spent $750 for our attorney to write this 5 page commercial mortgage broker fee agreement.  You can alter it for real estate, equipment or business acquisitions and/or a combination of all three.  Also, it can be easily changed from exclusive to non-exclusive representation.

We are giving it away for only $75.  Again we paid $750...  Also, keep in mind the agreement will be emailed to you instantly (in Word so you can easily change it) and you will NOT have any shipping costs. And yes, we offer a full 100% money back guarantee (SEE BELOW) for those of you that are as cynical as I am.      

Jeff Rauth
President

Commercial Broker Fee Agreement
   

Get it in Writing!

The 100% Guarantee:

YOU risk nothing.  I'm giving you a 30 day, 100% MONEY BACK GUARANTEE and am taking all the risk here.  Why would I do this? 1. these are legitimate agreements and I'm confident you'll agree after you own them. They are worth every penny.   The vast majority of people are willing to pay a fair price for a legitmate product.  2.  Because I know the day will come when you will be stuck on a deal and will want to co-broker it with us and you'll probably not want to burn any bridges with a viable source.  Protect yourself, your interests and YOUR SLEEP.  Don't let yourself get pushed around! 

Disclaimer: The information provided in this site is not legal advice, but general information on legal issues commonly encountered. Commercial Finance Advisors is not a law firm and is not a substitute for an attorney or law firm.