Should I have my own agent when discussing a property?

Question

I reached out to a listing agent on LoopNet and have been discussing a property with them. Should I have my own agent that represents me in this deal? I reached out to this agent about any deals he had, and he had this one. So he would be representing the buyer and me if I don’t bring in another agent. Is it rude if I have my own agent, who is looking out for my best interests?

I feel like I should have my own agent but thought I would ask.

Eliott Elias · Answer

You should always have your own agent, that realtor wants to make 6%.

Jeff Copeland · Answer

Loopnet, Crexi, and other sites which feature predominantly commercial listings are a little different from MLS listings when it comes to realtor commissions.

When a property is in the MLS, the commissions for both sides are agreed upon in advance (between the seller and the listing agent, and between the listing agent and cooperating brokers via the MLS listing). A property cannot be listed in the MLS is there is no commission being offered to a buyer's agent.

But that is not true for commercial listings, and commercial brokerages who do not list their properties in the MLS operate differently. You'd need to tell them in advance that you have your own agent, and ask them if there is a co-broker commission being offered.

Sometimes they offer a cooperating broker (buyer's agent) 1 or 2%, but about 50% of the time, they offer nothing. And if you have already been talking to the listing agent about the property, they will likely consider you "their client" and will almost certainly not pay any commission to an agent you bring in after the fact.

What this often means is you would end up paying your agent's commission on the buyer's side.

But before you freak out and say "I thought the seller always paid the commission!" (they do, to the listing agent...the listing agent decides what to share with a buyer's agent), keep in mind it ultimately all gets factored into your offer and the ultimate purchase price, and it's really all semantics in the end.

For example:

Scenario A (listing agent offering 1% commission): You could offer $1M and the listing agent pays the buyer's agent 1% ($10k).

Scenario B (if you know going in that you have to pay your agent 1%): You could offer $990k and pay your agent $10k in commission.

Either way, you pay $1M, and the seller gets $990k.

Of course, many agents can't afford to work for 1%. This is just an example. You could also combine the two (listing broker pays 1% and buyer pays 1%, or whatever is negotiated).

The point is, on the commercial side, it's kind of like the wild west: There are less consumer protections and less standardization than what you normally see on the residential side, so you have to ask these question ahead of time and not just assume a commission is being offered.