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Why Private Mortgage Brokers Yield So Much Power
In the world of business startups, investment brokers are the people you go to when you need capitalists to pump money into a startup. They cast such a wide net of venture capitalist that usually these brokers are the people you need to convince rather than the investors themselves. Because when they are sold on your ideas, they use the trust built between them and investors to push through your proposals.
Private mortgage brokers are in a similar capacity in the world of real estate. They are the people who will bring you Christmas in June when you thought that your property deal is dead due to lack of funds. They are in the business of matchmaking between borrowers who are unable to obtain financing with private lenders who don’t even need to see you to write up a cheque. It is a travesty that private brokers are not given enough credit for the critical value they add to transactions that would not have happened otherwise.
Make no mistake about it. Brokers are paid for access to their networks. And often times, borrowers only get the chance to see them swinging golf clubs at the country club or flirting with their secretaries in the office. What we don’t see are the years of hard work they have put into building their networks and solidifying their links with trust. Investment fund managers and private lenders, the people with the cash can release their funds just from a strong recommendation. This is how they can help you defeat Goliath.
And behind their usually uncomforting happy-go-lucky facade, they store a huge amount of real estate information and knowledge in the memory card between their ears. When you run into a private mortgage broker and tells him about the property you want to buy, he will quickly find out how viable your investment is and the scale of profitability potential. And you can expect these guys to have intimate knowledge on the real estate market. They will even have contact to places where you don’t know these places exist. To enforce his assessment, he would probably call up some of his real estate buddies for validation. If the numbers are judged to be good enough for his clientele, you can be 90% sure that you are going to get your greedy hands on the funds you need.
Once the loan has gone through, the broker will always be on standby in case it goes into default. They have their client’s interest to protect. They are going to get involved in collections, decision making, foreclosure activities, etc. And they will have all the bases covered. This is the extent of how shrewd and meticulous on protecting their clients.
What will be the closing costs?
You must know that nobody can give you an exact amount that you have to pay for closing. There are just too many variables that will make up your closing costs. Among those, here are some of the typical ones to look out for.
- Title abstract
- Title insurance
- Appraisal fees
- Broker fees
- Pest Inspection fees
- Legal fees
- Agent fees
- Credit reports
So how do you locate them for a deal?
Firstly, private brokers are elusive and not a professional that you can easily bump into at City Hall. In fact, the ones that you are able to locate may even be based overseas. But the intuitive place you can search for is the local business directories. Look for listings for “easy loans”, “private loans” or “bad credit” loans. Call up these businesses and inquire about private mortgages. But expect that these businesses are not who you are looking for. The important point is that they are more likely than the average person to be connected to a network that includes private brokers. As you go from referral to referral, you are going to eventually reach the right person sooner or later.
The next place to search for them are via the classifieds. If you reach a dead end as well, consider placing a 3-line advertisement in it stating “Real estate investor seeking private mortgage funding. Call John Doe at 1234-5676”. You might not get a direct call from the elusive one, but people in varying profession will probably call you up and you can ask for referrals again.
The idea of networking for success is taught in almost every self-help seminar being conducted today. If you find it difficult to locate a private mortgage broker, you will realize how important it is for individual investors to network successfully in the real estate business. If you already have a strong network in place, it is likely that someone within your network will have a link somewhere to who you are looking for.
Remember that the brokers want your business and they don’t actively make themselves difficult to track down. It’s just that the market is so big, yet the number of brokers who can last the distance is so small. The mass market goes to banks and financial institutions to settle their financing, and the rest go private, or go home.