Mortgage Brokers: Basics That You Should Know

The term mortgage broker refers to a company or person that can make arrangement for a mortgage between two entities. These entities are usually a lender and a borrower. The lender is known as a mortgage lender. This professional works directly with the borrower to help them opt for the right type of mortgage. In this article, we are going to find out more about this professional. Read on to now more.

Why should you use a Mortgage Broker?

Basically, this professional helps you throughout the process of looking for and applying for a mortgage. Their role is to get you the best deal on the basis of your circumstances. Listed below are some of the services they offer.

They help you make an assessment of your financial situation
They suggest the most suitable option to meet your needs
They help you search the market to help you look for the best deal to match your criteria
Now that you know about the role of these professionals, we suggest that you check out the pros and cons of working with one. This will help you decide whether you should go with these pros or not.
Pros

Convenience: If you don’t know anything about these markets and finance, you may want to work with a broker. After all, it requires a great deal of time, money and effort to look for deals, handle the paperwork and talk to lenders.

Access: Since these pros have a good deal of experience in the field, they are in touch with other professionals as well. For instance, they have a good business relationship with many lenders as well. Therefore, they can help you look for the best deal based on your needs.

Expertise: The problem is that the mortgage industry is not easy for everyone to understand. When the rate of interest goes up or down, it has a great impact on the number of mortgage deals. Therefore, consulting an expert is a stroke of genius. After all, you don’t want to make decisions based on your lack of knowledge.

Cons

Cost: Since these professionals charge for their services, you may have to set a budget to use their services. This will reduce the amount of money you can set aside for rainy days.

The service charges of these professionals vary significantly. Therefore, we suggest that you shop around before hiring one to meet your needs.

Limitations: It’s important to keep in mind that not all of these brokers have access to the whole market, which means depending on a single broker may limit the options available to you.

Quality: Experience and qualifications may vary between brokers. Therefore, if you end up hiring an inexperienced one, you may not be able to go through the process in a timely fashion. And you may not be able to get the best deal.

The 10 Best Tips on How to Keep Sabotaging Your Relationships Over and Over Again

This article lists the best 10 tips you will ever receive about how to fail in relationships. Paying great attention to them is a sure way to understand how to keep sabotaging your relationships over and over again. Read and internalize with the fullest attention.1. Never take responsibility for your part in the failure of your relationships. Always blame your partners. Taking responsibility shows that you too might be wrong. This can take away some of the respect and love your partner feels towards you. Being sure you are always right is the best way to prove your integrity and show how strong you are!2. Don’t ever try to get in touch and understand the needs which might drive you to sabotage your relationships. Trying to understand what might drive you to sabotage your relationships means that you don’t know yourself 100%. It means you don’t know “who you truly are.”In today’s world, where “knowledge is power”, not knowing “who you are” is a weakness. You can’t allow yourself to believe and assume you have personal needs you are not aware of which might drive you to harm your relationships.There is no reason for you to even consider the possibility that you have needs which cause you to sabotage your relationships (such as: the need to always be in control which drives your partners away from you; the need to always get attention and love which makes you too dependent on your partners; the need to always be “right” which makes you an unpleasant and stubborn person, and so on).3. Don’t even attempt to realize and understand the fears that control you and drive you to sabotage your relationships. It doesn’t make sense that you have fears you are unaware of which harm your relationships. It is certain that you realize your fears and know how to combat them. If you are unsuccessful in your relationships it is not due to fears. There is no reason to suspect you of having fear of commitment (which might drive you to escape from each and every relationship you begin to develop); fear of being alone (which might drive you to jump into a relationship with whoever blinks at you); fear of losing your independence (which drives you to be controlling with your partners); fear of being hurt (which might drive you to be cautious with your partners causing you to never dare to open up), and so on. No. Don’t let anyone suspect you have fears you are unaware of which cause you to sabotage your relationships!4. Don’t ever check whether your expectations from partners and relationships are unrealistic. It is great to have expectations! It is also natural to expect your partner to be there for you all the time; to love you unconditionally; to always understand you; to always remember your birthday. It is great to expect that you and your partner will always be in a good mood; will always be sexually attracted to one another, and so on.If you find out that your expectations are not fulfilled – that your partner doesn’t fulfill them! – it is not your fault! You have done nothing wrong! There is no reason for you to contemplate whether your expectations are unrealistic and try to modify them. If your relationship fails, there is no reason to suspect your expectations did any damage to it. Just find another partner!5. Believe in your fantasies and make sure they materialize! Fantasies are part of life. They give you something to dream about, something to look forward to. Where will you be without your fantasies? The more fantasies you have about partners and relationships the richer your relationship can be! Together with your partner you can reach the highest sky!Fantasize that your love will be just like in the movies. That your partner will supply all your needs. That the two of you will do everything together and never fight. That you will always agree on everything.Hang on to your fantasies! Let no one tell you they are unrealistic! They are part of “who you are” – of your perception of reality, of the way you approach love and relationships. Don’t ever give them up!6. Remember that you are always right! Whenever conflicts and arguments arise between you and your partner, never think – not even for a minute – that your partner may be right, and never ever compromise! Compromises in life indicate weakness, and once you compromise your partner might use it against you time and again in the future. You need to be assertive, even aggressive, knowing what you want and how to pursue it. Never succumb! If your partner doesn’t like it – it’s your partner’s problem, not yours!OR, by the same token -7. Always be submissive; compromising; giving in; allowing abuse; loving and understanding. Never allow yourself to do and express what you want to see taking place between you and your partner. Never express a different idea to your partner’s. Never refuse to do what your partner wants. The more you are there for your partner without any mutuality, the better it is for the relationship.8. Always react towards your partner and behave the same way you have in past relationships. Prove to yourself that you are consistent. That you don’t change from one relationship to another. There is no reason to choose different reactions and behaviors with different partners. If your past relationships failed it isn’t because something you did or not; it is more likely because something your partner did. Or maybe “the time wasn’t right”; or you were “too busy pursuing your career”, and so on. So there is no reason for you to devote time to thinking what to do differently in a future relationship. 9. Never try to change anything related to “who you are” and the way you behave in a relationship. The process of growing up has taken you years to arrive at where you are. During the years you have unconsciously learned and internalized (from your parents; the society you grew up in; books, movies, fairy-tales and more) a belief-system, a perception of reality; messages about love and relationships.In your adult life you continue to hang on to these. And this is fine. There is no reason for you to give them up. No reason to attempt to change anything you carry on with you for so many years. You are doing just fine. If your relationship fails, that’s too bad, but it isn’t a reason for you to begin doubting yourself or begin to “work” on finding out what has driven you to fail. Things happen, sometimes more than once.10. Resist, fight and reject any advice/suggestion to develop self-awareness.Self-Awareness is something only “losers” develop; only those who “don’t find themselves”; only those who “are not certain about themselves.”If you know who you are; if you appreciate yourself; if you feel you have a fine level of self-esteem – why develop Self-Awareness? It can only make your partner doubt your integrity; your strength; your stability.There is no reason for you to become aware of the ways in which you keep sabotaging your relationships time and again. Avoid any temptation to get to know and understand yourself better. Be and stay “who you are”. After all, consistency in life is a virtue!

Why Businesses Do Not Sell

It would be nice to live in a world where every business-for-sale was sold at top dollar. While there is no such thing as a perfect business free from all defects, there are a number of problems that can hinder a sale that could be remedied, if given enough time. This article lists ten of the reasons which are often cited as contributing factors in an unsuccessful sale or a completed deal for less than potential value.Business intermediaries need to be up-front with their seller clients, educating them on the challenges faced, and the likely impact that one or more of these issues will have on completing a successful transaction.1. UNREALISTIC EXPECTATIONSa. Valuation/Listing Price:Arguably, the price a business is listed at is one of the critical elements to a successful sale. An owner’s emotional attachment to their business, coupled with an inexperienced business intermediary’s desire to obtain the listing and please the seller, can be a recipe for disaster. Overpricing a business will deter knowledgeable buyers from establishing communications. Additionally, it will be extremely difficult to defend the valuation when a business has been priced unrealistically. The typical outcome is that the listing will languish in the marketplace and recovery becomes more difficult. Once on the market for months on end at the wrong price, the process in re-pricing and re-listing creates a whole new set of challenges, the least of which is maintaining credibility.b. Unrealistic Terms and/or StructureDeal structure, asset allocation and tax management must be addressed proactively and early in the process. Often the Buyer and Seller place all of the focus on the sale price at the expense of the ‘net after-tax results’ of a business transaction. In most cases, a seller could achieve a deal that provides a greater economic benefit when an experienced Tax Attorney/CPA assists with structuring the transaction. In addition to structure there are a number of other issues that could be problematic, including:

Seller insists on all cash at closing and is inflexible in negotiating other terms.

The buyer’s unwillingness to sign a personal guarantee

The lack of consensus on the Asset Allocation

Seller insisting on only selling stock (typically with a C-Corp)

Inability to negotiate equitable seller financing, an earn-out, or terms for the non-compete

2. PROFESSIONAL ADVISORSFor a successful sale to occur, a business owner must have the right team of advisors in place. An experienced mergers & acquisitions intermediary will play the most critical role – from the business valuation to negotiating the terms, conditions, and price of the sale as well as everything in between (confidential marketing, buyer qualification, etc). Aside from the M&A advisor, a business attorney who specializes in business transactions is critical. Once again, “who specializes in business transactions”. Any professional who has been in the industry for more than a year will be able to point to a transaction that has failed because the lawyer that was chosen did not have the specialized expertise in handling business transactions. Additionally, a competent CPA who is knowledgeable about structuring business transactions will be the third key role. While a business owner’s current legal and tax advisors may have the best of intentions in assisting their client with the business sale, if they are not experienced with mergers and acquisitions it would be highly recommended to evaluate alternatives. In some cases, there is one shot when an offer has been received and it is therefore imperative not to attempt to make a deal that is out of reach and impossible to complete.3. DECREASING REVENUES/PROFITSThe majority of buyers are seeking profitable businesses with year-over-year increasing revenue and profits. When a business has a less stellar track record with varied results or possibly declining revenue and/or profits, complications with the business sale are likely to occur. Not only will decreasing profits and revenue impact the availability of third party funding but it will have a material impact on the business valuation. While buyers traditionally purchase businesses based on anticipated future performance, they will value the business on its historical earnings with the major focus on the prior 12-36 months. For those businesses which have deteriorating financials, the seller should be able to articulate accurate reasons for the decline. Both the lender and the buyer will need to obtain a realistic understanding of the underperformance to assess the impact it is likely to have on future results. In cases where the seller is confident that the decline was an anomaly and is not likely to repeat itself, structuring a component of the purchase price in the form of an earn-out would probably be necessary. In other circumstances, when there are two or more years of declines, the buyer and lender will question “where is the bottom?” and what is the new normal. In this situation, a decrease in valuation will be inevitable. Cash flow is the driver behind business valuations and business acquisitions. The consistency and quality of revenue and income will be one of the key focal points when assessing an acquisition. It all relates to risk. Those businesses with dependable recurring revenue generated from contractual arrangements will generally be in greater demand than businesses who produce income based on a project based model.4. INACCURATE OR INCOMPLETE BOOKSOne of the most critical components to a successful business sale is for the business to maintain accurate, detailed, and clean financial statements that match the filed tax returns. Not only will these financial statements be the basis for the business valuation but they will also be the criteria for whether the business will qualify for bank transaction funding. Too often the business is managed as purely a lifestyle business that is focused only on short term owner compensation, without regard to building long term value. In these cases, the owner has taken very liberal personal expenses that may not be able to be added back when deriving the adjusted earnings. Given the importance these documents represent, a business owner should ensure that the books are professionally managed and up to date. Records that are messy, incomplete, out-of-date or containing too many personal expenses will only give prospective buyers and lenders reasons to question the accuracy of the books. Last but not least, businesses that have a ‘cash component’ will need to report 100% of this income for it to be incorporated in the valuation.5. CUSTOMER CONCENTRATIONBusinesses that have a handful of customers that produce a large percentage of the company’s revenues, will probably have customer concentration issues, especially if one client represents greater than 10% of sales. It is important for a business owner to recognize that a business which lacks a broad and diverse base of customers possesses a higher degree of risk for a buyer as the loss of any one of these large clients could have a material impact on the future earnings. As a result, customer concentration will have an effect on the valuation, deal structure, and salability of the business. Vendor and industry concentration can also pose complications when selling a business. Specialization can be a competitive advantage for a business and assist in winning contracts. However, this same narrow industry focus could be a detriment if it is perceived that the business does possess a broad supply chain and ample options to source products and materials.6. THE OWNER IS THE BUSINESSIt is not uncommon for the owner to play a significant role in the operation and management of the business. This is particularly true with smaller enterprises. Where this situation can present a problem is when the owner is not only the face of the business but also deeply involved with all facets of the company – sales, marketing, operations, management, marketing, and financial. If there are no key employees and there are few written processes and procedures, the business lacks a dependable and repeatable work flow. When it becomes evident that the business cannot operate effectively without the owner’s hands on involvement and personal know-how, it becomes problematic. Of equal concern is the relationship the owner may have with the customers of the business. If the customer does business with the firm largely in part of the relationship with the owner, this situation will create customer retention concerns and possible transition problems when the business is being sold. In summary, buyers want a business that can operate independently from the current business owner.7. THE OWNER(S) IS AGING AND HAS SLOWED-DOWNIt is not uncommon for a business owner to become complacent after running the company for an extended period of time. Becoming tired and lacking the previous ‘fire in the belly’ has a way of spilling over into the business fundamentals. The number of trade shows that the business participates in decreases, the travel and new customer sales calls that routinely took place on a daily basis in the early years, have been paired down. The investment spending on equipment upgrades, vehicle replacement or marketing programs have been cut back. Innovation has come to a grinding halt and the business is on auto pilot. The financials have luckily held steady but for how long? An owner who has become burnt out almost unavoidably transmits their lack of zeal and drive to their staff and clients in a number of subtle ways. The net result is the company’s performance slowly begins to deteriorate. Unfortunately, this situation can become even more pronounced when the owner finally makes the decision to sell the business and mentally checks out at the worst possible time. Transferring ownership can be viewed by some as a highly emotional process, and the decision to sell at the right time is often ignored until the issue is forced upon the owner (failing health, divorce, disability, etc.) and usually at a fraction of the former valuation.8. INDUSTRY IS DIMINISHING OR THREATENED Over the last two centuries there have been a number of industries that have developed and grown significantly. In this same time frame, many new industries have been created while others have become extinct. The future outlook for a given industry will have a direct impact on the valuation and marketability of the business during a sale. Businesses facing obsolescence or mired in a shrinking industry will face an uphill battle when it comes time to transitioning or selling the company. Maintaining a diverse offering of products and services that are relevant to the market, not just today, but also with an eye to the future, will enable a business owner to avoid this situation. Not only will this assist in mitigating the impact from declining sales but also demonstrate to a prospective buyer that the business has a clear path to grow in the future.9. CHOOSING THE WRONG LENDERFrom loan application approval to transaction funding is a process in business transactions that can take six weeks or more, that is with an ‘experienced’ business acquisition financier. Many deals have fallen apart during this time frame because the buyer became aligned with the wrong financial institution. There is nothing worse, for all parties involved, to find out four weeks into the process that either the loan terms previously promised were not correct or worse, that the bank underwriter declined the loan.In the field of business acquisitions, not all banks/lenders are the same. There are conventional loans, SBA backed loans, and there are lenders that provide cash-flow based financing and others that only provide asset based funding. One bank may turn down a borrower for an SBA 7a loan while another institution will readily accept it. Every lender has its own unique and frequently modified lending criteria. Therefore, buyers need to ensure they are working with the right lender from day one, or valuable time is wasted causing the deal to be compromised, or lost to another, better prepared candidate. Buyers should consult with the business intermediary representing the sale to determine which lenders have reviewed and/or pre-approved the transaction for funding. Obviously, buyers who are prequalified from the start and verify that the bank’s lending criteria conforms to the type of businesses they are evaluating, will be the best positioned for a successful acquisition.10. COMMERCIAL PROPERTY ISSUESFor some businesses the saying “location, location, location” cannot be more important to the value of the company. Typically, this will pertain to retail businesses. If the physical location is of major importance, the business buyer will seek assurances that they can either purchase the real estate or be able to sign a long term lease. On the flip side, the business could be located in a part of town that has fallen on hard times or could be located on the owner’s personal property, both situations necessitating that the business be relocated. Also, some businesses are not easily relocatable without affecting the current customer base. All of these circumstances add another layer of complexity to the transaction.Additionally, the type and size of facility can also have a material impact on the sale. If the facility is not large enough to provide the enterprise a sustained growth path, a buyer could become disinterested. Another situation could be the value of the property. If the current owner purchased the land/building a decade or two earlier and the financials or recast do not reflect a current FMV rent/lease payment, valuation problems will occur.Business transactions involving the sale of commercial real estate can be hampered by the Environmental Site Assessments (ESA’s) – Phase 1 and Phase 2. Property that is contaminated can be very costly to clean up and will have an impact on the closing. When this situation arises, it will be important for the buyer and seller to have a clear understanding of the costs to resolve the issue, which party is responsible, and whether a price offset will be warranted.Other complicating factors involving commercial real estate include zoning changes that require a property to be brought up to new codes, and clear definition of who bears responsibility and the cost of this process. Last but not least, the agreement by the landlord with either a lease assignment or offering a new lease at comparable rates.SUMMARYMost small business owners have spent the majority of their life building their business. It is not uncommon for a business seller to become so emotionally attached to the company that they look past some rather glaring problems that a business intermediary, a lender, or prospective buyer will immediately recognize. It is natural for a seller to want to obtain the highest price possible for their business. There is so much bad information on the web related to multiples and business valuations that this should not come as a surprise. M&A Advisors need to be honest and direct in educating a business seller on the challenges faced in a potential sale, the range for a realistic transaction price, as well as creative terms and structuring options that might be utilized. Being a people pleaser and ignoring any potential problems will only provide the seller with unrealistic expectations. In the arena of business negotiations there are few if any “pleasant surprises”. Dealing with issues up front rather than late in the sales cycle process should be the golden rule.