Commercial Broker vs Me

11 Replies

I have begun my real estate investing career with my first deal.  I'm looking to expand and my search has brought me to several commercial properties (2 quadplexes being sold as a portfolio).  I have contacted the broker on several deals and asked for rent roll and proforma.  I'm to the point where I need to see the properties myself.  Since I'm new to the commercial game, I'm asking for help on the rules.  

Should I call another brokerage and get someone to represent me at the showing?  

What are some of the differences of a commercial showing vs a real estate agent showing?  

Looking for any advice or helpful hints.

Thank you,

Blake

Hey, Blake: 

Congrats on your endeavors.  My take:  ALWAYS find an Agent to represent your interests, especially when new at any Asset class.   Not sure about CO regs, but in Mass., any  Broker represents a Seller/Lessor BY LAW, unless & until a Buyer/tenant explicitly asks the Broker to be his/her agent, and the broker accepts.  Until that moment, the Broker owed all loyalty to the Seller/Lessor.  Even if you called him/her he still represents the seller until you say the magic words.  

I don't know about you, but I don't want the person I found, vetted, "hired," and asked to help me look over/through/at property representing the person I'm going to have to negotiate with.  

...and that Seller's Agent you're thinking of calling by yourself? Yeah, they'll get the entire commission for "not acting like your Agent" and for owing all fiduciary duty to their client.  

If for no other reason than to act as a check/ balance, get an Agent and make sure that you say the right words so  their legal duty lies with you.  

My $0.02.  

@Blake Andrus I would do just the opposite of what @Steve McGovern suggested. I would tell the listing broker I want to use them because the market is so hot and I can pretty much do everything a buyer's agent would do for me. 

That doesn't mean that is the right answer for you though. Because you're a newer investor it is risky to not have a professional on your side. I'm just saying it's also a disadvantage if you get a buyer's agent especially if they don't speak the REI language.

@Jeff Kehl The sellers agent is a well known broker in the area.  I would be getting a commercial broker to represent me, not a real estate agent.  Someone who speaks the language.  Am I missing an advantage of having the sellers agent represent me?

@Blake Andrus the advantage of using the seller's agent is that they would keep the entire commission. If you go out and find your own commercial broker to represent you as a buyer's agent. They will be much less likely to want to deal with you. But what I'm trying to say is you may need to do that if you're not comfortable in your ability to handle that yourself.

Unless you're comfortable in your ability to navigate a transaction I would get another agent.  I own a brokeage and still hire other agents when my knowledge base isn't there or if I don't have time to run the deal myself.  

A commercial agent may not be as helpful as you think however as this is really two residential transactions.  For this in particular I would find someone who specializes in multi-family in your area.

I appreciate all the input.  I would want someone on my side considering where I'm at in my investing career.  I have already talked to the sellers agent and another agent in the area with mulitfamily experience.  Is the next step to ask the other agent with mulitfamily experience to be my agent and go with him to see the properties?  

Originally posted by @Blake Andrus :

I appreciate all the input.  I would want someone on my side considering where I'm at in my investing career.  I have already talked to the sellers agent and another agent in the area with mulitfamily experience.  Is the next step to ask the other agent with mulitfamily experience to be my agent and go with him to see the properties?  

 Yep.  I' m a tough client, but before you sign anything I would ask him to analyze the deal to see if he comes up with something that looks like he knows what he is doing.  You'd be amazed at how many professionals who specialize in the niche still have a pretty rudimentary understanding of the product.

@Blake Andrus

I have to agree with @Daniel Kurkowski . Commercial brokers play an important role in many cases but the transaction you are describing is not something I would say you absolutely need a broker on. In fact, many good commercial brokers may not have an interest in it because it's not worth their time. But I also can't see how it would hurt if you find a good one willing to work with you. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

Originally posted by @Jeff Kehl :

@Blake Andrus the advantage of using the seller's agent is that they would keep the entire commission. If you go out and find your own commercial broker to represent you as a buyer's agent. They will be much less likely to want to deal with you. But what I'm trying to say is you may need to do that if you're not comfortable in your ability to handle that yourself.

THIS ^^^^

Whole heartedly agree 

It really is amazing the ‘insider info’ the listing agent gives in suggesting how much and what sort of offer to make. 

Thank you everyone for the input.  Sounds like I only lose some leverage if I bring in another broker.  However, I gain insight, area knowledge, and reduce risk with an extra set of eyes on the project.  Considering this is my first larger venture I think a broker would be a good idea.  The caveat being the broker knows what he is talking about.