As a finance broker, when you have a client that needs to fund their property development project, whether it’s a new build, purchase and refurbishment, or a conversion, it’s a big deal for them and you need to make a good impression, because it could lead to more work in the future.
So, you go through the list of short term property finance providers and get in touch to see what is possible. Some you know and have used before and some are new to you, with recommendations from colleagues prompting your interest in them for this project.
When you take time to consider everything pitched to you, the solutions are all slightly different. The costs may vary wildly, or be very similar, whilst some may even seem far too good to be true. When this happens how do you decide which funder best fist your needs and those of your client?
The problem can be exacerbated by decision inertia, which can result in you dealing with those you have dealt with before, even if the outcome was less than optimal. The results could be different this time, right?
Your decision cannot be just cost based. There has to be more than just numbers to the relationship between your client, you as their finance broker and the lender.
Making the decision
It’s a major decision and not just in terms of cost. You will have to work with this provider as your partner and the work they deliver will reflect on you and your relationship with the client.
Will they make you look good? Will they take all the stress and leave you free to spend time with your client, putting them at ease?
The question is, how do you decide when there is little to choose between the solutions and the costs are all broadly similar, once you’ve established your comparing apples with apples?
Of course, you could close your eyes and stick a pin in the list, or use the same funder as last time, even though the deal was slow and there were lots of frustrations along the way, but at least you know them.
Ultimately the decision rests with you. Now your instinct becomes more important, and trust is a significant factor – out of all the people who can support the deal application of your client, who do you trust the most? Still not sure?
Instinct honed over millennia
Fortunately, your human brain has been developing its natural instinct for decision making for thousands of years, from a time when the right decision was a matter of life and death.
And now to help you make difficult decisions, an equation that helps define trust has been formulated:
Trust = Credibility + reliability + intimacy
Credibility – Does your provider know their stuff? Do they understand the challenges you face? Are their references appropriate and high quality? Are they experienced delivering short term property finance?
Reliability – Do they deliver on their promises? Have they been around long enough? Are they stable as a business? Is their team settled?
Intimacy – Do I like them as a business? Do I find their people approachable and engaging? Do they work hard to get deals done?
Self-orientation – Possibly the most important consideration. Is the suggested solution addressing the interests of my client or theirs? Is the solution right for me or just the easiest solution for them to deliver? Is the offering truly client-centric? Will my client be impressed by my choice?
You can see from the equation that the less the service provider is self-orientated the higher they will score for trust – which should make perfect sense.
If they care more about delivering the right solution for you and what delivers the best outcome for you and your client, rather than what’s easiest for them, then you should trust them to deliver the right deal, on time at the right price.
These thoughts came to me as we sat with a table of property finance brokers, enjoying Wales play Australia in Cardiff. Once all the talk of rates, LTVs, Gross Development Values and the like had subsided, the conversation turned to relationship strength, trust and a service that instils confidence.
Unsurprisingly, our clients trust Signature Property Finance to deliver time after time and our reputation grows accordingly. If you want to understand why we are so trusted, please get in touch and we’ll explain in person.