Brokerage Fees – Who Comes Out on Top

A broker walks a fine line every day in the brokerage industry.  The broker represents three different and distinct parties when writing loans:

1. The broker is responsible for representing the lenders and selling their products.  They are generally paid a commission for these sales.
2. The broker is responsible for helping their clients obtain the deal that best suites their needs and financial situation.
3. The broker is in business to make a living.

How do you, as the broker, balance all of these and remain fair to everyone.  Ultimately, you have the biggest responsibility toward your clients.  You are already being paid a commission from the lending institution, so it may not be fair to charge your clients as well.

Of course, not all lending institutions give the same commissions and there are a few who give no commission at all.  The key is always to keep your clients best interests at heart when negotiating loans for them.  Do not try to sell them a loan that is going to give you a higher commission.  Sell them a loan that is the best option for them.  If you are to receive a lower commission or no commission, then it may be time to consider a small fee.  You do have to make a living.

The key is to state your fees up front.  Make sure your clients knows that you are looking out for their best interests and depending on the lender they go with you may charge them a small fee for the service.  You can be honest with them about the commissions you earn and what you expect from them.  Your clients will respect you being straightforward with them.

The role of the broker is definitely a balancing act and you are the one doing all the balancing.  Being fair to everyone involved can be difficult, but if you ensure that your clients understand your fees and agreements with the lenders form the beginning they will more than likely be happy working with you.  Honesty and integrity are the name of the game and they are how you have happy clients.  Happy clients bring referrals and referrals are the key to growing your business.