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Comercial Real Estate Brokers

Posted by  on Apr 16, 2009
 
They have historically found ideal properties for their customers to buy or lease, and commercial real estate brokers are now adding a new service to their already arduous services. Since there has been a rise in mortgage rates recently, and to a red-hot real estate market, real estate brokers are finding it valuable, for both themselves and their customers, to add mortgage brokering to real estate brokering. Commercial real estate brokers have found that excellent benefits accrue to themselves by helping their customers finance investments in real property. For example, if a customer purchases or finances a ten million dollar property and the real estate broker assists with eight million dollars in financing, then the broker will earn from 1/4% to 1/2% for a simple referral.

When a planner takes on the role of mortgage broker, then the earned fee would be 1%. On an hourly basis, compensation ranges from $200 to $400 an hour for a $1 million deal. Because of opportunities available to themselves and their customers, commercial real estate brokers have sought mortgages for those who invest in a wide range of commercial properties.

Commercial real estate mortgages often have balloon payments due as the mortgages terminate. Invariably, those balloon payments are refinanced, and commercial real estate brokers can seek refinancing for their customers by performing the role of mortgage brokers. In addition, because there is a constant market of loan transactions, many real estate brokers are choosing to serve as regular part time mortgage brokers, who earn commissions regardless of the interest rate climate.

Those who focus strictly on commercial real estate investments find that there are fewer rules and regulations than in the residential market: Good Faith Estimates, Truth-in-Lending Disclosures, and other time-consuming paperwork required in the residential mortgage industry are not customary in commercial mortgage transactions. Many commercial lenders do not restrict or disclose the payment of fees to referring mortgage brokers, including yield spread premiums.

In general, mortgage brokering has become a highly remunerative addition of services that ambitious aim entrepreneurial commercial real estate brokers can offer to their customers. It is no wonder that so many real estate professionals are adding mortgage brokering as an important and valuable adjunct to their services.

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