Why do brokers ask to sign NDA?

5 Replies

Hello, BP!

Why many (if not all) multifamily listing agents/brokers ask for NDA before showing property financial details? How am I supposed to discuss these listings with other people that may be involved in the deal on my side (agent, banker, partner, etc.) without breaking the NDA yet showing all the detail to them?

Another twist is a foot note that I saw on some ads: "No Brokers. If you are already working with a broker please disregard my ad". What does it mean? Is this a red flag?

Thanks
Nick

Originally posted by @Nick B.:

Hello, BP!

Why many (if not all) multifamily listing agents/brokers ask for NDA before showing property financial details? How am I supposed to discuss these listings with other people that may be involved in the deal on my side (agent, banker, partner, etc.) without breaking the NDA yet showing all the detail to them?

Another twist is a foot note that I saw on some ads: "No Brokers. If you are already working with a broker please disregard my ad". What does it mean? Is this a red flag?

Thanks
Nick

The ''no brokers'' in ads mean that the offer is off-market and they wish to keep it that way entirely. They're not interested in any broker / salesperson on the buyer's nor seller's end. They don't want the property listed.

There are NCNDAs that can be signed off by all parties involved on the buying side. Just have your broker / buyer (if its not you) sign off on it also. Be sure to explain your position in the transaction is not the principal. 

Kudos,

Mary

If I want to post property financials on BP for comments or send them to someone to get their opinion that would be violation of NDA, correct? It is not realistic to ask every BP member to sign an NDA :-)

If I have an agent who represents me why would a "no broker" broker be against that agent being involved? 

Thanks

Nick

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May just be a ghost ad. May be an agent without an exclusive, May be an owner trying to attract a unsophisticated buyer and doesn't want anyone with any real knowledge in the game. And we all know most of this information has been stretched to BS proportions anyway. I remember a seller all cocky and smiling telling what a great deal I was getting. He saw that I was young and probably stupid.  I hadn't got my license yet but when he saw the contract required that I be able to get his schedules from the IRS plus statements from each tenant to verify status of everything I thought he was going to have a stroke. Well he didn't know it but I had talked to about half of the tenants already and he had been very creative in his scheduled rents. He had them paying increased rents but they got about the last two months of their lease free, future buyer had a major headache coming their way.

@Nick B.  

Another possibility regarding the reason for stating "no brokers" could be that the listing broker doesn't want to share commission. If it is FSBO, and you brought your broker along for advice, then your broker would want to get 50% of what the commission would have been (unless you have another arrangement for how to pay your broker?).

If the seller is represented by a broker, they may be stating "no brokers" simply because they don't want to share.

Brokers may know the rules and ethics in these situations, maybe someone will chip in.

@Nick B.   It's true what Wendy stated. Some brokers / investors are selfish, for a lack of a more sensitive word, in that they don't want to share commission yet they can't find their own buyers and usually seek the assistance of a wholesaler or birddog to locate the buyer and they don't want to pay the birddog either. Go figure but I see those ads all of the time on linkedin. 

My opinion is to steer clear of those transactions because its a waste of time if they're not trying to pay you and you were warned up front. Unless you're able to negotiate your payment to be secured from the buyer(that you brung to the table) at the closing. Technically stating, the broker isn't sapposed to pay any non-licensed 3rd parties anyway.  However, an investor can pay you for your services as there is no law preventing it.

Forget about presenting the entire deal to BP in those cases because you are not only circumventing to every member here but to everyone on the internet as well. Once you type and post something online its public information for all to see(with the exception of those private pro users, still its violating the NCNDA in a huge way).  If you are not sure about something in the contract(s) then you need to hire an attorney.

Kudos,

Mary