What should I expect from my commercial brokers?

Question

I have a question for anyone experienced in working with different commercial brokers for buying mid to larger multi family property.

I have worked with several now and I have found varying levels of helpfulness. I've had some who will hire and oversee inspectors, draft documents, if necessary work with any government agencies, help with market due diligence, meet with contractors at the property, etc.

On the other hand, I have had brokers tell me they need me to do virtually everything, including drafting all of my own documents for them to hand to the other party.

I nearly always work buy with the listing broker. I obviously prefer the more helpful brokers as they save me days of work throughout the transaction, but I'm not sure if I should be expecting all of the service some offer me. Is that what they supposed to be doing? I feel funny asking them to do tasks they were obviously not going to do. What all do they do for you? Would this be solved by just bringing in another broker/agent local to the area to split the commission and do all of the work I want done? If I start buying their listings with another agent who splits the commission, will I start losing deals and getting offers rejected I otherwise would have won?

Thanks for any helpful input!

Jordan Callaway · Answer

@Jace Holt you nailed it on the head. In residential brokers want buyers to have separate agents.

It’s tough bc if you bring in another broker on larger multifamily, the guys who list everything just stop wanting to bring you off market deals or even see to it that you get the deal bc outside brokers who are incompetent bring unknown risk into a listing agent’s process for their seller. So a good work around is if you REALLY like an agent and want them to represent you but you don’t want to stop getting deals you can build in a finders fee for your Buyside broker to be paid at closing out of your side of the deal (not seller’s side like a broker co op). This way, you still see deals, but you have someone giving you white glove service and do all your misc real estate things.

Or, if you like certain listing agents just work with them direct and on other deals you don’t like the listing agent bring another agent in and pay him yourself 1% (just factor into your offer price) to do everything for you. It also depends on who finds who. If a listing agent calls you, he implies he wants to rep you. If you have a broker looking and finds another broker’s listing from an advertisement, that’s different, of course. Then the listing agent will probably cooperate on and pay him out of seller proceeds.

If a broker brings YOU a deal and you say “I have an agent who handles everything for me, please pay him half.” You run the risk of the broker moving you down on his buyer list and even potentially not wanting to work with you again, like I said this is different from residential

Jace Holt · Answer

@Jordan Callaway Thanks for the input. I like your idea of separately paying a buy-side agent. I look at it as money well spent to get better deal flow.

One of the difficulties is that I am continually looking in new markets where I am unfamiliar and could really use a local expert to make the process smoother. Apart from your suggestion, I'm not sure there is any good way around that until I have a solid contact in most of the regions.

I should also add that while there is occasionally a delicate balance that has to happen to avoid a conflict of interest, I prefer the listing broker/agent because they have the most information and are only 1 step removed from the seller. I do not enjoy double broker negotiations because the communication can get a little less precise and lose my ability to have a real problem solving negotiation. Even when just buying through the listing broker, I wish I could just negotiate directly with the seller. Do you have any ideas on how to make that situation happen?