Archwood Real Estate, Inc.
Investment Brokerage & Real Estate Financing
(818) 376-8582
What are the 3 biggest mistakes Borrowers tend to make?
Sometimes a new Client will ask what issues tend to come up again and again during the
commercial mortgage financing process and what mistakes should they try and avoid.  The
following are the top 3 mistakes that come to mind:

  • Working with multiple brokers.  The myth is that taking this approach benefits the
    Borrower because it generates more market coverage and insures a better result.  The
    fact is that when lenders start seeing the same loan submission coming in from multiple
    sources they assume that no one is actually in control of the deal.  Lenders are then less
    likely to put their best efforts forward in such a fuzzy environment.  The Borrower's best
    strategy is to do some meaningful due diligence, check references and select a
    knowledgeable and reputable broker.

  • Failing to recognize and effectively negotiate significant deal points in the lender's
    offer letter right at the beginning.  For commercial mortgages, a lender's initial offer
    letter or term sheet is typically short on fine detail.  Nevertheless you should bring up any
    significant points that are important to you at this early stage.  Various important deal
    terms may be much more difficult to modify later on, once the loan has been approved
    and the commitment letter has been issued.

  • Not considering all of the currently available loan products for your situation.  Lots
    of owners know one or two lenders and fall into the habit of calling the same one or two
    lenders, with whom they are comfortable with, when it's time to refinance an old
    property or to finance the acquisition of a new one.  This is a good habit to overcome.  
    The financing marketplace is ever changing.  To get the best result, you need to scan, or
    have a good broker scan, the overall landscape in order to determine your best move.  
    There may be players and products that an owner/borrower is unaware of that may turn
    out to be the most logical fit, and the smartest business move.
Archwood Real Estate, Inc.  -  16217 Kittridge St.,  Van Nuys, CA  91406  -  Phone: (818) 376-8582  -  Fax: (818) 376-8572
California Broker #01445207