Apartment Investing Confidentiality Agreement?

Question

Hey everyone,

I recently contacted a broker I found on LoopNet. They responded with a "confidentiality agreement" for me to sign. The first 8 points of the agreement seemed to be pretty reasonable items about contacting the broker instead of the seller, not sharing details of the property with anyone else, etc. However, the last item was basically an exclusive agency agreement with the broker for 12 months. I've never even communicated with the broker via email, and am not comfortable committing to them as an agent before I know anything about them, or they know what I'm looking for.

I'm new to commercial investing and am unsure whether this is common practice or something that should concern me. All thoughts are welcome.

Thanks!

Michael Le · Answer

Not common. It's them trying to rope in newbies to an exclusivity contract. Most buyers do not use a buying broker since the seller does not pay for the cost of buyer's representative like SFR does. If you do use one, you should have a better relationship with them than with someone willing to slip it into a ND/NC agreement.

Tom Furlough · Answer

@Andrew Johnson Thanks for the advice! I wouldn’t have an issue if I already had a reason to be comfortable with them, but since I don’t know anything about them, I’d say it’s not the best way to start off a business relationship.

Tom Furlough · Answer

@Michael Le Thanks for your help! It definitely feels like they’re trying to catch newbies not being thorough or  not understanding what they’re signing.

What would you say is the best way to find your first apartment building?      I like the idea of having a broker help on a first purchase, but if they are really expensive, and mostly represent sellers, that may not be the best route.