There’s no one way for a commercial mortgage broker to do business. Some sell technology, some sell convenience and some sell pricing. All successful mortgage brokers tend to have one virtue in common, however. They provide quality service to their borrowers and lenders.
Commercial mortgage brokers must establish a code of conduct that is cast in bronze and serves as a cornerstone for their business. The surest way to achieve this is to adopt good working habits. A strong argument can be made that it is just as easy for mortgage brokers to form good habits, paradigms and operational practices as it is to form bad ones.
Developing good habits
Many mortgage brokers believe they are providing borrowers and lenders with a good service, even if they are not. This is a serious mistake. Ethically, a licensed broker has a fiduciary duty to their clients to provide good service. On the business side, a mortgage broker must offer a compelling reason why a potential client should use them in the future. Excuses do not normally matter to a client. They only remember the results.
Given that brokers are constantly faced with a shifting set of circumstances, the question is, how can a broker provide good service? Although the unique problems in each loan transaction make it impossible to develop a set of rules that covers every circumstance faced by a broker, it is possible to establish a blueprint for conduct. There are habits that all brokers should live by.
No. 1, the broker should adhere to a strict rule of confidentiality to safeguard a client’s entrusted information from unauthorized access, use, disclosure or theft. It is privileged information. Keep it that way. Next, the broker must be accountable. This means the broker is accountable to all stakeholders involved in the potential transaction, especially the prospective borrower and lender. The broker is obligated to complete the assigned tasks in the most professional manner.
Third, the broker should show reasonable care to avoid any action or behavior that could harm the client. A fourth rule of the road is loyalty, which is a key to the success of any long-term business relationship with borrowers, lenders and all other stakeholders. This also means remaining faithful to one’s obligation to promote and protect the client’s interest.
The fifth habit is obedience. The commercial mortgage broker must follow the client’s instructions both ethically and legally. The next rule is to serve as an advocate for the client. The broker should advance the client’s issues, goals and objectives. Advocacy also tends to win the support from others who may be involved in the transaction.
Last on the list of good habits is the need for brokers to make full disclosures. The broker should be transparent and honest with all parties, and disclose all material facts. The cost of full disclosure is far less than the cost of not disclosing relevant and material information.
Dealing with change
These seven habits are fundamental to serving a client with the highest level of professionalism, but commercial mortgage brokers also are constantly faced with changes that can impact the customer experience. The typical commercial mortgage will have unexpected problems and circumstances that will challenge the quality of service required of a broker.
Company management often make changes in an effort to remain profitable and increase market share. Companies regularly adopt best practices, introduce new strategies, conduct mapping studies and analyze key performance indicators. Changes at the company level can impact customer service. Without a core set of values that allows good habits to take hold, a broker may get lost in a seemingly infinite number of ideas aimed at improving performance.
The commercial mortgage broker should operate within the realm of their expertise, experience and professional competence. The experienced broker expects the unexpected, and tends to be more prepared to find a solution to unexpected problems. A broker should never claim to be an expert on a subject in which they have little or no actual experience. It may well come back to embarrass them, harm the client and, in extreme cases, expose the broker to legal liability.
Mortgage brokers also are obligated to keep learning. Products, procedures and regulations are constantly changing. In most cases, it is the process that will determine the outcome. Successful brokers know what they don’t know, but are constantly expanding their knowledge and questioning today’s basic assumptions.
Brokers who adopt good habits will distinguish themselves in the marketplace. Clients will recognize their professionalism, and this conduct will speak volumes about the broker as an individual and their operating practices. These also are the broker’s tools for maintaining a competitive advantage in the marketplace, driving growth and achieving sustained profitability. And isn’t that why the broker is in business?
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It should lastly be noted that life, in general, and business, in particular, is full of disappointments, shortcomings and flaws. Even the most skillful and experienced commercial mortgage brokers make mistakes and come up short at times. If the broker has been operating under a set of rules that anchors them to good working habits, however, the occasional setback will simply mean that they have lost the round, not the fight. Success is achieved by those who never give up.
