“industry standard” doesn’t always mean what you think...
That’s definitely true, but I’d argue “industry standard” can actually work in your favor if you know how to leverage it. Lenders expect certain terms, but there’s usually more wiggle room than they let on. I’ve pushed back on balloon payment schedules before and gotten more favorable terms—sometimes just asking for clarification or a tweak opens up options they don’t advertise. Not saying it’s always easy, but it’s not always set in stone either.
Honestly, I’ve seen “industry standard” used as a bit of a scare tactic, especially with first-time commercial buyers. It’s like, if you don’t know to push back, you just accept the terms as gospel. But yeah, there’s usually some room to negotiate—though how much depends a lot on the lender and the market.
- I’ve had clients get stuck with prepayment penalties they didn’t even realize were negotiable. Sometimes just flagging those gets you a better deal.
- Balloon payments are another one… lenders act like it’s non-negotiable, but if you show you’ve got other options or a solid plan, they’ll sometimes budge.
- One thing I’m curious about—has anyone actually managed to get a lender to drop or significantly reduce origination fees? I’ve had mixed results, but maybe I’m missing a trick.
Feels like the “wiggle room” is there, but you’ve gotta know where to look and not be afraid to ask. Curious if folks have had luck with other terms, like interest rate floors or extension options.
Feels like the “wiggle room” is there, but you’ve gotta know where to look and not be afraid to ask.
That’s been my experience too, but I’ll admit I’m always a bit wary about pushing too hard—sometimes it feels like if you ask for too much, they just move on to the next borrower. On origination fees, I’ve only ever gotten them knocked down when I had a competing offer in hand. Otherwise, they just shrug and say “that’s standard.” Extension options are a bit easier, especially if you can show a solid exit plan, but interest rate floors? Never had much luck there, honestly. Maybe it’s just the lenders I’ve dealt with, but they seem pretty set on those.
On origination fees, I’ve only ever gotten them knocked down when I had a competing offer in hand.
Yeah, I hear you on that. I’ve found the same—unless you can actually show them a better deal, they just don’t budge. It’s frustrating, but I guess it’s their way of keeping margins predictable. I’m super cautious about not overplaying my hand, too. Sometimes I wonder if being too aggressive just puts a target on your back as “difficult.” Still, I’d rather try than leave money on the table… even if it rarely works with the rates.
unless you can actually show them a better deal, they just don’t budge.
That’s been my experience too. I tried to negotiate without a backup offer and got nowhere—felt like talking to a wall. Maybe it works for some people, but I didn’t have much luck. I guess lenders just aren’t that desperate right now.
