Better Camaraderie Will Benefit Clients
Brokers should work with agents to enhance communication and build borrowers’ trust
By James Huang, managing partner and founder, BRC Advisors
The current recession has
broad implications for commercial real estate. Far from another
customary economic downturn or a buying opportunity for companies with available capital, this economic
crisis likely demands a complete overhaul of traditional
business models and delivery of services within all sectors of the commercial real
estate industry.
Some commentators believe this is merely a technology problem, as though better
software alone can erase the
vast number of vacancies that
mar the landscape.
Others have argued that
this situation is the result of
poor forecasting — devise a new formula,
so the strategy goes, and mortgage brokers can better prepare themselves for the
next challenge.
These assertions often overlook the
warning signs that preceded this crash,
however. They also ignore a principal
cause of the problems within the real
estate industry: a proprietary network
of commercial real estate brokers and
agents, each assigned to a specific territory with explicit instructions to not
intrude upon someone else’s “turf.” This
agents to resist proprietary listings and to
get their clients the best information they
can — even if it means entering another
agent’s area.
If mortgage brokers can help make this
happen, then they perhaps
can find more deals to fund.
This also can result in happier clients who are not disheartened by the real estate
process.
Here’s where to start.
“Mortgage brokers and lenders can
help to fix the status quo. If nothing
else, the improved dynamic will go a
long way toward reducing unnecessary
competition and uniting real estate
and mortgage professionals’ often-
disparate fields of interest.”
opportunity is an empty word.
It is this model — a network of assigned
offices with inherent proscriptions —
that must change. If the artificial walls
between colleagues dissolved and offices
pooled their resources and profits, then
there would be greater incentives to succeed. High fees would be unnecessary,
information would be open and free, and
clients would be happier than the current
circumstances permit.
And best of all, real estate agents would
no longer be fierce competitors but rather
collegial colleagues who help one another.
This could result in a winning situation for
mortgage brokers and lenders who no longer will have to assuage the hurt feelings of
unhappy clients.
system undermines clients’ ability to
make informed decisions, thus weakening real estate professionals’ credibility as
supposed experts.
Mortgage brokers are in a prime position to help promote a more open and honest approach to the commercial real estate
business. They can encourage real estate
Brokers protected.
Piedmont Capital Funding.
Your commercial loan partner.
Little or no commercial experience? Your loan will close with
the most competitive rate and terms. Utilize our experience to
keep and strengthen your client relationships.
» Yield spread available
» $500,000 to $20,000,000
» Competitive multi-family, office, industrial,
and retail loans
Recently closed loans:
» 16 unit multi-family, 5.85% interest rate, fixed for 3 years
» 42 unit mixed use, 6.28% interest rate, fixed for 10 years
» 6,000 square ft. office, 6.35% interest rate, fixed for 5 years
Enhancing communication
Increased communication also is needed
between real estate agents, mortgage brokers and lenders. This will serve to make
mortgage professionals part of real estate
transactions from the start, while eliminating institutional and
personal obstacles.
In addition, mortgage brokers and lenders
can help to fix the status
quo. If nothing else, the
improved dynamic will
go a long way toward
reducing unnecessary
competition and uniting
real estate and mortgage
professionals’ often-dis-parate fields of interest.
In every bad economy,
there is hope. Transforming the way we do
business and seizing that
hope can help to make
the commercial real estate industry a symbol of
strength.
And while the old way
likely won’t yield willingly to new ideas, real
estate and mortgage professionals should
move ahead with purpose and confidence.
Doing so, clients will be better served, and
the image of the real estate industry will
enhance in the public eye.
“The health of
the commercial
real estate
profession rests
with ending the
mutually exclusive,
proprietary
system that
prevents agents
from sharing
intelligence and
helping clients
properly.”
Call (510) 740-1435 for today’s interest rates
James Huang, managing
partner and founder of BRC
Advisors, oversees the
company’s downtown Los
Angeles office. Huang’s
vision was to create a
company that provides
3645 Grand Avenue, Suite 303 • Oakland, CA 94610
Contact Nils at (510) 740-1435 or loans@piedmontcapitalfunding.com
Creating transparency
One of today’s biggest challenges for mortgage brokers
involves how real estate
agents do business. These
professionals often work in
an environment that limits
their ability to deliver quality service for
clients consistently.
That is, there is a zero-sum culture
within real estate firms and across company
offices that lionizes one agent and demonizes others. That system
breeds distrust, envy and
complacency and will not
work in this economy.
It also comes directly at
the expense of mortgage
professionals because it
makes them passive accomplices to the actions
of real estate agents who
fail to consider the long-term implications.
Transactions with
real estate agents should
be convenient, transparent, economical and as
stress-free as possible
for clients. The health of
the commercial real estate profession rests with
ending the mutually exclusive, proprietary system that prevents agents
from sharing intelligence
and helping clients properly. The current business model tends to discourage
communication and enforce territorial
rights aggressively.
For example, a franchisee with a national real estate brokerage company pays
a substantial fee for an assigned area, and
fellow franchisees are not allowed to enter
into that business district. This arrangement actually limits franchisees’ ability
to make more money, however, and it is
terrible for clients. In fact, it denies clients
the one thing that real estate professionals
claim to offer: information.
If the only information real estate agents
give clients is through their own listings —
in other words, they don’t tell their clients
about better opportunities another franchisee may have for fear of losing a sale —
then service quality is meaningless and
superior market knowledge and exceptional
client service through customized financial and
operational solutions. He also has launched and
managed several companies from the startup
to profitability phases. Huang has a bachelor’s
degree from the University of California at Los
Angeles. Reach him at (213) 226-8700 or
jhuang@brcadvisors.com.
