Dr. Smith is a pediatrician who owns his office building. Dr. Smith does all his banking with a big bank with a branch down the street from his office, and that includes his fixed rate mortgage, which is approaching the end of its term.
The big bank has its perks: they offer every banking service under the sun and Dr. Smith feels like they have a pretty good relationship.
But here’s the problem: they’re just one lender. They aren’t commercial real estate experts. And they assume that they own Dr. Smith’s business.
So when Dr. Smith goes to the big bank to discuss his commercial mortgage, one of two things can happen:
Dr. Smith sits down with a loan officer at the big bank and discusses what he wants out of his mortgage. More than anything, he wants to know that it’s taken care of and that his rates are fixed far into the future.
The loan officer smiles, goes to consult with his boss and comes back with an offer.
The dollar amount isn’t quite what Dr. Smith hoped for, the rate’s shorter than he would like, but he figures it’s the best the big bank can do. After all, he’s been a customer there for decades: they wouldn’t try to pull one over on him. So he signs.
Dr. Smith gets an offer from the big bank but it isn’t quite what he’s looking for. He asks for some time to mull it over.
He takes the offer over to a local mortgage banker, Largo Capital, to discuss his options.
He knows that Largo doesn’t charge until they close so it’s free to consider their offers. Largo also has access to numerous different lenders which leads to much more competitive terms.
Largo brings back an offer for more dollars, a longer term and a better rate. Dr. Smith is overjoyed.
Now he has two options: accept Largo’s offer, or take it back to the big bank and see if they can beat it. Whatever he chooses, he wins. And all it took was sitting down with a commercial real estate expert.
Be like Dr. Smith: don’t let your big bank take you for a ride while they’re only getting bigger. Before you sign anything, talk to Largo.