As published in Scotsman Guide's Residential Edition, April 2006.
When transitioning to commercial lending, it is important to understand that there are different processes than on the residential side. In fact, mortgage processes vary throughout the commercial industry itself. Commercial clients' expectations may be higher than those to which residential brokers are accustomed.
In a questionnaire we developed to learn more about commercial borrowers, we asked their chief complaints when dealing with commercial-lending companies. The responses of this question were surprisingly universal. Overwhelmingly, the respondents had five top complaints.
To avoid alienating your commercial clients, you should learn these complaints. They are, from lowest survey results to highest:
No. 5: Being addressed rudely
There are many interpretations of the word "rude," such as abrupt correspondence, inappropriate language, etc. Many respondents, however, feel that it is rude to be addressed too familiarly.
Here's an example: Instead of being addressed as "Mr. Smith" upon the first few encounters with a loan officer, one client resented being addressed by his first name, James. He resented it more when he was addressed as "Jim."
You can never go wrong by addressing an individual as Mr. or Ms. It is never acceptable to call a client "honey," "dear," "sweetheart" or another sugary term of endearment.
It is best to always assume the highest level of courtesy. In fact, in today's market, addressing clients politely actually garners instant attention from them. It also establishes you as a more competent professional.
No. 4: Surprises
Unlike in residential lending, there isn't an easily identifiable, common core among all commercial-loan products. As such, there isn't much commonality among the various lenders' practices, processes and requirements. So it's natural to assume that commercial borrowers aren't going to know exactly what to expect during the loan process.
For example, your company may request something at the start of the loan process that other companies have not requested from clients until they were about to close. This kind of confusion can lead to surprises -- unpleasant surprises, at that.
When meeting with clients, make sure you clearly and accurately explain what they can expect throughout the loan process. If it's a loan product with which you are unfamiliar, however, do not even attempt to outline the process and expectations for them. Get someone with solid knowledge of that particular loan product to do so.
Customers hate surprises, unless it's something like, "Oh, by the way, we've decided to lower your rate by 1.5 percent and give you an extra 10 years to pay us off, and we're ready to close today at 3 p.m., at which time our limousine will pick you up and take you to the title company."
No. 3: Slow process
Part of this complaint is founded on unreasonable client expectations. Once again, the competitive world of residential lending is partly to blame. Consumers are constantly bombarded by ads telling them how they can quickly close a loan with little documentation and little more than a pulse for credit qualification.
Because today's borrowers have become somewhat spoiled by this ease and access, it's sometimes difficult for them to cross over into the commercial-lending world without expecting the same. Much of this problem can be handled by having a clear conversation with your clients at the start and by giving them the proper expectations for their loan.
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