An off market commercial property that I recently became aware of has some interesting characteristics about the deal that I am a little concerned about. The agent that says he is in direct contact with the developer, yet has no listing agreement with him. He says that the owner is paying a 3% fee total so 1.5% for each side. He also says that he is the only agent that has this deal. What is the best way for us to protect ourselves to ensure this guy is not bluffing? What are the normal obligations of an agent that is in his shoes as far as providing info to us to ensure we get paid. He said that he is willing to sign an NCND that will state that we get paid what he is stating. It seems a little weird to me that he would be the only person that would have a deal of this caliber. Please let me know what you would do in this situation? Thank you.
Who is the agent? Are they really a commercial broker instead ?
I usually look at track record and years of service in the field. Sometimes an owner will consider selling off market but does not want to officially list it. I have some clients like that. They key is for the broker who has the off market property to have a fee agreement in place. Sometimes a seller will say they will pay a certain commission based on what the sale price comes in at. It is not as cut and dry as a listing agreement with XX percent of the sales price paid at closing. The tenured brokers in the business do not want to damage their reputation by misrepresenting to another firm on what the commission split would be or what the seller would do.
If it is a wholesaler or a fee taker middleman type thing and they have little to no experience that can be a recipe for disaster. If you do not have protections on the fee then when negotiations get tough between a buyer and a seller they often times try to look to other fees they are paying to lessen them for relief. This is where experience comes in. A professional has to know if they spend XX time on a deal that they will be compensated on a deal for a successful closing.