A commercial mortgage broker fee agreement template is a crucial document that outlines the terms and conditions governing the relationship between a commercial mortgage broker and a borrower seeking financing for a commercial property. This agreement serves as a legal contract that clearly defines the broker’s responsibilities, fees, and the borrower’s obligations.
Key Components of a Commercial Mortgage Broker Fee Agreement Template
Commercial loan fee agreement: Fill out & sign online DocHub
A well-structured commercial mortgage broker fee agreement template should include the following essential components:
1. Parties Involved
Borrower: The entity seeking financing for the commercial property.
Commercial Mortgage Broker: The intermediary who will assist the borrower in obtaining a mortgage loan.
2. Property Description
Legal Description: A precise and accurate description of the commercial property, including its address, legal boundaries, and any relevant zoning information.
Property Use: A detailed explanation of the intended use of the property, such as office space, retail, industrial, or multi-family housing.
3. Loan Amount and Terms
Loan Amount: The total amount of financing requested by the borrower.
Loan Terms: The duration of the loan, interest rate, repayment schedule, and any other relevant terms, such as prepayment penalties or balloon payments.
4. Broker’s Fees
Fee Structure: A clear explanation of how the broker’s fees will be calculated, whether as a percentage of the loan amount, a flat fee, or a combination of both.
Fee Schedule: A detailed breakdown of when and how the fees will be paid, including any upfront fees, success fees, or ongoing commissions.
Fee Disclosures: A statement disclosing any additional fees or charges that may be applicable, such as lender fees or appraisal costs.
5. Broker’s Responsibilities
Loan Placement: A detailed description of the broker’s obligations to assist the borrower in finding suitable lenders and negotiating favorable loan terms.
Due Diligence: A statement outlining the broker’s responsibility to conduct due diligence on the borrower’s financial situation and the property’s value.
Communication: A commitment to maintain regular communication with the borrower throughout the loan process, providing updates on progress and addressing any concerns.
6. Borrower’s Obligations
Information Provision: A requirement for the borrower to provide accurate and complete information to the broker as needed, including financial statements, property appraisals, and other supporting documentation.
Cooperation: A commitment from the borrower to cooperate with the broker in the loan application process and to follow any instructions or guidelines provided.
Reimbursement: A provision outlining the borrower’s obligation to reimburse the broker for any out-of-pocket expenses incurred on their behalf.
7. Termination Clause
Termination Grounds: A list of circumstances under which either party may terminate the agreement, such as failure to perform obligations or material breach of contract.
Termination Procedures: A description of the steps required to terminate the agreement, including notice requirements and dispute resolution mechanisms.
8. Governing Law and Dispute Resolution
Governing Law: A specification of the jurisdiction whose laws will govern the agreement.
Dispute Resolution: A choice of dispute resolution method, such as mediation, arbitration, or litigation.
9. Entire Agreement
Integration Clause: A statement that the agreement constitutes the entire understanding between the parties and supersedes any prior or contemporaneous communications or agreements.
10. Signatures
Signatures of Parties: The agreement must be signed by both the borrower and the commercial mortgage broker to be legally binding.
Design Elements for Professionalism and Trust
To create a professional and trustworthy commercial mortgage broker fee agreement template, consider the following design elements:
Clear and Concise Language: Use plain language that is easy to understand, avoiding legal jargon or technical terms.
Consistent Formatting: Maintain consistent formatting throughout the document, using headings, subheadings, and bullet points to improve readability.
Professional Layout: Choose a clean and professional layout that enhances the overall appearance of the document.
Brand Consistency: If applicable, incorporate your company’s branding elements, such as logos or colors, to create a cohesive and recognizable document.
By carefully crafting a commercial mortgage broker fee agreement template that incorporates these key components and design elements, you can establish a clear and legally sound framework for your professional relationship with borrowers.
