Community/How do you handle borrowers who shop your term sheet to other brokers?
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Stephanie Okaforbroker
Jun 18, 2025 at 8:00 AM
How do you handle borrowers who shop your term sheet to other brokers?
This happened to me last month and I'm still frustrated by it. Spent 2 weeks working a deal, got a great term sheet from my lender, shared it with the borrower, and then found out they took the term sheet to another broker who submitted it directly to the same lender (cutting me out). The lender honored the second submission because they had no exclusivity agreement with me.
How do you protect yourself from this? Do you use broker agreements? Do you redact lender information on term sheets?
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5 Replies
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Thomas BlackwellbrokerJun 18, 2025 at 10:00 AM
Stephanie, this is unfortunately common. My approach:
1. Broker agreement signed before I share ANY lender information — not just the term sheet, but even the lender's name
2. The agreement includes a fee protection clause: if the deal closes with any lender I introduced, I'm owed my fee
3. I redact the lender name on term sheets until we have a signed agreement
Harsh? Maybe. But it's happened to me twice and now I protect myself.
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Cynthia ReeveslenderJun 18, 2025 at 12:00 PM
From the lender side: we honor the broker who submitted first. If a second broker submits the same deal, we go back to the first broker and ask if they're working it. This protects our broker relationships. Not all lenders do this though — ask your lenders about their policy upfront.
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Tanya WilliamsbrokerJun 18, 2025 at 2:00 PM
this happened to me too and i was devastated :/ broker agreements are the move. lesson learned the hard way
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Connie BauerbrokerJun 18, 2025 at 4:00 PM
I've had a broker agreement in place for 15 years. It's not about distrust — I tell borrowers it's standard practice and protects both of us. Most professional borrowers understand and sign without issue. The ones who push back on signing... that tells you something.
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Stephanie OkaforbrokerJun 18, 2025 at 6:00 PM
Cynthia — that's really good to know about lender policy. Going to ask all my lenders about this. Thomas and Connie — broker agreement is clearly the answer. Implementing immediately.