In part two of our Trusted Advisor series we are delving into your role as a protector. As a broker you are in a unique position because you are negotiating a transaction both for your client, the borrower, and your partner, the lender.
The advice that you give and measures you take when underwriting your applications can make all the difference when it comes to protecting your client, your lender, the insured and in case we forgot to mention – you too!
Picture a parrot: due diligence, due diligence, due diligence!
The steps you take at the very begging of the application process help to prevent fraud, reduce the number of deals that fail to close and result in stronger relationships with your clients and lenders.
Why does your client come to you? Just to get the best rate? Or do they come to you because you know what the best products are and because you will negotiate with the bank – or because they trust you to help them with all of their financial planning needs as it relates to their home?
Remember the rule: a happy customer tells a couple of people of their experience while an unhappy one tells 10. This is a business that thrives on repeat business and referrals – you cannot afford to have unhappy customers.
Every deal that fails to close can potentially result in:
- A frustrated referral source – if the deal came from a real estate sales professional or other referral source.
- An upset client – there is nothing worse than finding out your plans fell through after trusting what you perceive to be an expert.
- A disgruntled lender – lenders will only underwrite so many deals that fail to close before they reconsider accepting your applications – not to mention that your deals that don’t close impact the lender’s closing rates with their insurers.
Uncovering potential problems on closing doesn’t even necessarily mean the deal will be lost. It actually prepares you and your partners to find solutions for challenges before they begin to present problems – like registered mortgages on title and issues with equity.
Simple things like validating who is on title to the home, what the home is worth and current encumbrances are minimum due diligence measures that you can perform to reduce a large proportion of deals that may face problems on closing.
This will not only better protect all parties to the transaction but will also make you more profitable and maintain your reputation as your client’s trusted advisor!
For more tips about how to protect yourself and your partners when it comes to due diligence, please visit http://brokers.purview.ca/index.php.