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Wednesday, December 17, 2008

Daily Observation - Pleading Ignorance

I hope the title grabbed you, Why would a professional, experienced broker plead ignorance when it comes to pricing a deal. The reason is very simple WE HAVE NO IDEA OF WHAT CAN AND CANNOT BE FUNDED TODAY!

Now I know you think that I have gone off the deep end when I make such a categorical statement, but the truth is we don't. And anyone who tells you they do, unless its their own money don't believe. Now am I saying that the use of a broker is now worthtless because you, Harlan cannot get deals close. NO I'm not saying that at all.

What I am saying is that when talking to your clients share this information with them so their expectations are realistic. Let me give you a perfect example.

We had a call with a potential client that received a "LOI" from a bank, and they wanted me to explain it to them. Granted this was not our LOI, actually it wasn't anyone LOI it was a financing spreadsheet which the "client" treated as an LOI. Well after reviewing this great "LOI", I called the bank that issued it a week before. Guess What?

None of the programs that they were so aggressive about were offered by the bank anymore. The 20 Year fixed which this Bank was well known for is now a 5 and 10 year balloon.

Another example we were talking with another potential client today and they were telling us that they had been negotiating with a bank on a piece of commercial real estate, the bank led them to believe they were VERY interested in the deal, strung them along for about four months, then you guessed it they had no interest in the deal anymore.

So hopefully these two examples will tell you why I consistently tell my clients I have no idea if I can get the deal done today for you or not. BUT, and here's the important but: if I believe in the deal I am going to do everything within my control to fund the deal.

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