The point I paid only earned itself on the weird files

What did the broker actually do on the mixed use file that you couldn't? I don't mean that as a dig, I'm trying to work out where the labor is. Was it knowing that one lender existed, or was it framing the vacancy in a way underwriting would accept?

The "who's funding this week" line is the whole product as far as I can tell. Everything else is a website. A lender list you built in March is a historical document, not a sourcing tool.

My guy funds off his own balance sheet and I've done four with him. No broker in sight and the terms haven't moved. But I also haven't brought him anything he'd have to think about, which is probably the actual point ledger's making.

So the rule is roughly: if the deal is shaped like the last one, direct. If a lender has to think, pay the point. Is it really that clean or am I flattening something?

Worth flagging that who can even charge you that point depends on where the property sits, since mortgage broker licensing triggers and exemptions vary by state, and business purpose loans get treated differently from consumer purpose ones in most of them. I'm working through my own licensing now and the difference between those two categories drives half the rulebook. Confirm with the regulator in the state you're lending in rather than taking a broker's word for what applies.

Nobody's pricing their own hours in this thread. I ran a shopping exercise myself on a bridge file last year and it ate about eleven hours across two weeks, including one lender who ghosted after collecting my rent roll. If my time is worth anything at all, ledger's $3,300 gap gets thinner fast.

cobalt, that's the number I've been trying to get someone to say out loud. If shopping costs a borrower ten hours a file, the broker point is really a labor purchase with a side of access.

ledger, on the repeat borrower economics: did any of your brokers cut the fee on the second or third file? A quarter point on a known borrower with clean files still beats zero, and I'd expect a decent shop to price for retention.

Everyone argues about the point at closing and then the loan lives for nine months. I manage through the servicing side of a lot of these and the broker is almost never around after funding. When the draw desk goes silent for two weeks, whoever placed the loan has already been paid.

trellis, the ones worth keeping do stay in the file. Five years running a service business taught me that the follow-through is the only thing anyone remembers. I've watched a broker get a stuck draw released in a day because he'd closed nine loans with that shop, and I've watched another one stop returning calls the afternoon the wire hit.

I thought the broker was paid by the lender and it never came out of the borrower's pocket at all. That's how it was explained to me anyway. Doesn't that make ledger's point column wrong?

rigging, I had the same idea and I'm now less sure. ledger, when the broker was paid by you at closing versus paid by the lender, did the rate move by roughly the amount of the fee? If it did then it's the same money wearing a different hat and the choice is only about cash at close versus cash over the hold.

The stale list problem is real and I've paid for it. Two of my four bridge lenders changed their box inside six months, one dropped anything with a ground up component and one went from 80 to 70 on purchase advance without telling anybody who wasn't mid file. I found out by submitting and getting a no.

That's the argument for keeping a broker warm even on deals you could place yourself.

Land is a different planet. Raw acreage with no entitlement, I have never once found a direct lender who'd look at it without an introduction. The broker point isn't a shopping fee there, it's the price of getting the file read at all.

I'm still on my first purchase and the numbers might as well be in another currency. Everything I've been quoted is conventional at a fixed rate with the originator paid by the lender. Does any of this framework carry over or is the investor side genuinely separate?

quill, mostly separate from what I can tell. And honestly the whole thread is a good argument for why I don't want to be in the flip business. Shopping four lenders per deal is a second job with no title.

I keep two brokers and three direct lines and split by deal type. Cosmetic flip in a market I've done ten in, direct, and I know the answer before I ask. Anything with a use question, a partial vacancy or a seller who needs to close in twelve days, broker, and I don't argue over the point.

ledger, the thing your sheet can't show is the deals your direct lenders killed that a broker would have saved. Mine's not zero.

rigging, lender paid compensation exists on the investor side too, but it isn't free. The lender prices it into rate or into an exit fee and you're paying it across the hold instead of at the table. On business purpose loans the disclosure requirements are much thinner than what you'd see on an owner occupied consumer loan, and how much has to be disclosed varies by state, so read the fee agreement rather than assuming a standard form exists.

The clause I always look for is whether the broker agreement survives if I close with a lender they introduced but I later go back to on my own. Some of those tails run twelve or eighteen months. That's the paragraph that decides whether ledger's direct list is actually his.

The one thing I'd pay a point for every time is a broker who reads a rehab budget correctly. I had a file where the lender's underwriter held back the entire kitchen line because the scope said "refresh" and the budget said $38,000. Scope creep on paper, before a single wall came down. The broker who caught it before submission saved me a month.

Question I'd have been too embarrassed to ask anywhere else. How do you actually know your broker shopped it? I've had two term sheets come back that looked suspiciously like the first one with a different logo. Is there anything you can ask for that proves the file went out more than once?

compass, ask for the submission list with dates and the declines in writing. A broker who really shopped it has that in their email and hands it over without a fuss. A broker who sent it to one relationship starts explaining why that isn't how it works.

ledger, your comparison is missing exit fees. I've read term sheets where the headline was 0.5 better than the competition and there was a 1 percent exit on the back with a minimum interest period of six months buried two pages later. On a four month flip that minimum interest clause is the entire deal economics. Compare total dollars paid over your realistic hold, not rate plus points.

Still working out how this shows up on paper. If I pay the broker a point at closing, does it appear as its own line on the settlement statement, or does it get folded into the lender's origination? Feels like a question with a boring answer that I'd still rather know before I sign one.

Down at my price points none of this applies. On a $70,000 house a full point is $700 and no broker is getting out of bed for that, and the lenders who'd fund it have minimum loan sizes above the purchase price. Rural small balance is its own gap and I've never seen a broker solve it.

hollow, that's genuinely useful to hear because everything I read assumes a $400k loan. ledger, does the broker math change at all if the loan is $150k? Feels like the fixed work is the same and the point gets much smaller.

I track 22 lenders in a sheet with last contact date, last quoted terms and last known box. About six months in, roughly a third of it is wrong. That's my measured decay rate and it's the honest cost of going direct, because keeping that sheet current is maybe three hours a month of calls that produce nothing.

Which is why I voted the way I did. ledger, your $3,300 per file gap is real, but you're comparing it against a list you're implicitly maintaining for free.

Coming from the build side, the 0.35 on rate is the least interesting number in your post. What matters is whether the lender's inspector shows up in three days or ten, because my crews don't wait for a draw and idle labor costs more than the spread. If a broker can tell me which lender's draw desk actually functions in December, that's the point right there.