I found a property that looks promising and I worked directly with the listing agent. This is a multifamily unit which I’m new to buying. The owner of this property seems to be a seasoned investor. I don’t have a agent in Philadelphia and wanted to know if I should get a buyers agent or can I get a real estate attorney - is there another way for me to get representation.
What are things I should be aware of ?
I am a licensed real estate agent in NC. I have not yet bought a multifamily unit, but a family member owns 4 quadplexes in NC, and I have helped manage them. This is the disclaimer so you don't give my opinion too much weight.
In my opinion, you DO need a buyers agent. Unless things are vastly different in Philadelphia, when a buyer lets the listing agent "help" them buy, you don't really get someone looking out for your interests. For example, the listing agent owes loyalty to the seller....if you pop up and want to buy the multi-family unit, who do you think the listing agent will "protect the interests of" most? The listing agent may be honorable and fair; they may not be, too. You may never know the difference until years later.
When buying residential real estate (not what you are proposing, but what I have experience with), the seller pays the buyer's agent. (The seller pays the listing agent a %, and the listing agent pays the buyers agent from that % they get. It is spelled out in the MLS--cooperation and compensation.). If the listing agent also represents you, the buyer, they "earn" the full % fee, and may or may not advise you to protect YOUR best interests.
Please call a few realties in the area of the multifamily property and ask to speak to a buyer's agent with experience in helping investors buy a multifamily. It should not cost you anything, and it could save you much $$ and stress in the long run.
Best to you!
@Rashmi Chanduraj , when you say multifamily, how large are you talking? How seasoned are you in financial analysis? If you are new to it, I won't say you need a buyer's agent, and I would highly recommend not just hiring any agent, but I would seek out someone with experience as an investor. If that is an agent, great. If it is a property manager, that could be better.
Now, even if you try to bring on a buyer's agent, you have already started engaging with the listing agent, and you could have an issue trying to bring in a different agent. If you decide to bring on a buyer's agent and can find one that is well versed with multifamily operations, you need to be up front, as soon as possible, with the listing agent and let them know. Some agents (many in my experience) become very territorial of commissions and any new agent may not want to come in, since you already started engaging with the listing agent.
That being said, what I would really recommend is some type of consultant. Call some property managers that can help you understand market rents, likely repair budgets, vacancy, Capex needs, etc. Most typical residential agents will not know this type of information, but this is the information that will make or break the deal.
@Sherry McQuage thank you so much for your input. Totally makes sense - It’s a brand new building so I was wondering if i can use that as leverage to negotiate further and get a attorney rather than a agent. But not having done it before i was leaning in to learn what other have done.
@Evan Polaski - thank you for your input. This is a brand new construction and talking to a management company is a great idea even though I’ve run the numbers on this one. I don’t know of any consultant per say or other investors.
@Rashmi Chanduraj How familiar are you with the neighborhood in Philadelphia you are buying in, the valuations of the surrounding area, the process of leasing in the city of Philadelphia? I am an investor & agent in Philadelphia, and unless you know the submarket you are investing in very well, there is a good chance the listing agent / seller has this at an inflated valuation. I would highly suggest working with professionals.
Hey @Rashmi Chanduraj, have you signed any documents stating that the sellers agent will represent you? also if need assistance id be more than happy help you.
Why would you not have your own agent? It doesn't cost you anything. The listing agent has a fiduciary duty to the seller first and is not getting the selling commission and the buyer-side commission when you could have an independent agent work the buyer side for you and protect your interest and help you with the knowledge of the area. Get in touch with @Jose Soto if you need help in Philly, but always, unless you are very experienced as an investor and know it will help the deal, use your own agent. Most "investors" who are just looking and don't have an agent and then buy are not as familiar with the area or the investment vehicle as they should be.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you