Utilizing a Buyer Agent
| Read comments | Add comment / Rate this Article | Article by: Mark Casey |
If you are considering buying commercial or investment real estate, you will want to obtain the appropriate expertise to help make your experience a profitable and enjoyable one. Commercial brokers vary in focus and expertise: some specialize in listing properties for sellers; others are transaction facilitators; still others focus specifically in helping buyers/investors. This article addresses the different types of commercial brokers and the benefits of working with a buyer agent.
Types of Brokerage Relationships. Most states allow for different forms of brokerage relationships. Here in
- Seller Agent
- Transaction Broker
- Buyer Agent
Seller Agents exclusively represent the seller’s interests. Transaction Brokers assist both the buyer and the seller throughout the transaction without advocating for either party. Buyer Agents exclusively represent the buyer’s interests. With all these choices, how do you decide which type of broker is right for you?
Seller Agents develop their expertise in marketing office, industrial, retail and multi-unit housing properties. A good seller agent knows how to best present his/her property and get the property sold. Transaction Brokers are skilled in the art of facilitating. They are adept at considering the goals of both the seller and the buyer, and figuring our ways to meet both these sets of needs. Buyer Agents develop their expertise in the areas of relationship-building and advocacy. The buyer agent’s role is to understand both the financial and non-financial goals of his or her client, and to skillfully advocate for the client-tenant.
Cost and Savings. Regardless of relationship category, commercial brokers are generally paid one-half of the listing broker’s commission for bringing a buyer to the table and helping consummate a sale. Usually, brokers are compensated by the seller’s listing broker. The buyer-side broker is paid a success fee, typically in the 1.0 to 3% range, when the transaction occurs. This fee is built into the cost structure of the sale so you, as tenant, do not pay a higher price for utilizing a buyer agent. Having buyer agent represent you will not cost your more……..it could save you significant time and money.
Value Proposition. The buyer agent’s job is to position you in the market so that sellers are competing against one another for your purchase. This competitive process allows the markets to do their job producing the most attractive investment opportunities. Reduced pricing, flexible terms and seller-provided financing, are optimized for the buyer when property sellers are in competition for your business. And in today’s soft market sellers are fiercely competitive, so it pays to have them competing for your business.
Other Benefits. In addition to helping you negotiate the best purchase price and terms, a buyer agent is a ‘connector’ as well. He/she connects you with the expertise you need, including knowledgeable real estate attorneys, 1031 Intermediaries, lenders, title companies and building inspectors. Lastly, the buyer agent’s job is to make the process enjoyable to you, the buyer. Most investors get involved with commercial real estate transactions only once every several years. The buyer agent deals with commercial property transactions on a daily basis. The buyer agent’s job is to be your experienced guide and trusted advisor, so that you, the buyer, can relax and enjoy the process, knowing your interests are well cared-for.
This information is not intended to replace qualified legal and/or tax advisors. Every taxpayer should review their specific transaction with their own legal and/or tax counsel.
