Brian Rubins

Face to face is best

The phone is ringing, brokers are calling, terms are issued and then silence.

Is there a reason?

First, the borrower may fail to purchase the property or decide not to proceed with the capital raising or refinance. In those instances, nothing can be done. However, it is possible that the enquiry was circulated to all the lenders on the broker’s ‘hit list’ and, of course, only one could succeed.

Sometimes, after terms are indicated, the borrower goes underground. Or, having chosen the lender, the broker does not inform the other lenders that they did not win the opportunity and so it remains open in their CRM system.

Sadly, this is a problem of the internet age, where email communication devalues the process and behaviour becomes very casual. Even with good email follow-up procedures, enquiries just wither on the vine without the lender being any wiser as to the reason the opportunity was lost. A phone call may take a little more effort but is far more effective.

Not all loans are simple to explain and often an application form just does not suffice. Also, there are proposals where much more information is needed before a decision can be made, particularly larger loans, say over £1m and residential development finance.

If lenders wish to convert more enquiries to completed loans, meeting face to face with the borrower and broker is the answer. Why waste time emailing, or phoning, backwards and forwards when one meeting with the lender’s BDM and a senior executive from the company and a visit to the property would provide all the information that is necessary to make a commitment?

Making the effort to meet the borrower demonstrates commitment, may influence the choice of lender and, conversely, the extra information obtained will enable the lender to be more positive and possibly trim the terms. After this, underwriting becomes so much easier, particularly for the lender to understand the valuation and report on title. Having walked around the asset, reading the title plan should be simple. It is worth the effort and shortens the process and makes a positive decision much easier to make. The broker loses nothing by this course of action and remains involved throughout the negotiation and benefits from better service and more completions.

During the loan term, there will be a requirement for communication between borrower and lender. This may be because not everything has gone strictly to plan. Possibly a longer time to repay is needed or an increase in the loan where there has been a cost overrun on a residential development. If a relationship has been created, it is much easier for the borrower to ask for help and for the lender to provide it. These are not credit card transactions and should not be treated as such.

Put simply: email is OK, phone calls are better, but face to face is best.

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    Steven Dunleavy

    A fantastic article Brian, this is so true, siting in front of a prospect and seeing the whites of their eyes is so important, firstly for the professional introducer and then most obviously the funder!

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