Friday, July 6, 2007

5 Reasons "Not" to hire a Buyer's Agent

Commercial real estate bloggers have been speaking on the hot topic of exclusive buyer's agents in commercial real estate lately. Below are a couple of recent posts

Benefiting from Tenant Representation at The Future of Commercial Real Estate

Buyer's Agents in Commercial Real Estate (Here at The Real Estate TrendMill)

What about the other side of the argument???

Maybe there's an argument for not engaging a real estate professional to represent you in your next commercial real estate negotiation. Maybe you should just do it yourself.

Below are what I think are the top 5 reasons a business owner/manager would NOT want to engage an exclusive buyer's agent and just represent no particular order...

  1. I'm an excellent negotiator. A business owner could do just fine negotiating with a property owner or listing agent for a commercial property. The owner of a plastics company that specializes in injection molding negotiates the price of resins all the time. What's the difference if you're buying resins or real estate???
  2. I'm going to get a better deal if the listing agent doesn't have to pay a co-broke. If a business owner just contacts the listing agent directly rather than working with a buyer's agent then chances are the listing agent is going to go to bat for the business owner even though he has a fiduciary relationship with the property owner since he will be able to keep the full commission.
  3. I have time to spare. A business owner can just spend 2 hours per day calling on classified ads and searching Internet listings for a new building and maybe an hour or two at the end of the week driving around the city looking at different properties. The company is growing like crazy thus the need for more space and the business pretty much runs itself so how busy could the business owner/manager be???
  4. I have an attorney for things like this. A business owner can just pay his attorney to go over the paperwork provided by the listing agent and review any purchase documents. For $200/hour it's a great deal rather than risking having to overpay for a property since the owner has to pay the buyer's agent his commission along with the listing agent's commission. The business owner can just pay his attorney a little extra and have him research some comps to make sure the price is right.
  5. I'm limiting myself by working with just one agent exclusively. A business owner would actually make out better by calling several real estate agents in the area to let them know that he is looking for a property. Now they are all out there working for him. If he works with just one exclusive agent, how will the other agents in the area know he is in the market for real estate???

Clearly you can see that in fact there are several reasons a business owner/manager would not want to work exclusively with one buyer's agent.

**That's satire with an "S"**


Sandy said...

This is a great post and goes for commercial as well as residential. I like your blog--haven't seen many others about the commercial side.

Rob Beland said...

Thanks Sandy...please come back often.

Louisville Realtor said...

Great post, I think your 5 points hit the nail right on the head.

JerseyShoreCommercial said...

I work as a commercial agent and would never insist a client only work with me because (1) no agent can have access to ALL available listing in the market because a lot of commercial deals are marketed off-market and (2) I should have to earn a client's business - not ask for a guarantee up front.