Dual agency mischief in commercial real estate?

Question

Hi all, I'm trying to understand how the big commercial real estate agents (CBRE, JLL, etc) market deals. For example, if I want to sell a five-unit multifamily in Washington DC, it seems these agencies will market almost exclusively to their own clients -- and thus end up on both sides of the deal (dual agency).

Is this how it actually works? If so, it seems like they are not marketing to the vast majority of potential buyers (because even these big players have <20% market share in any given market). And thus how are they achieving the highest possible selling price?

I'm also wondering if working with a smaller listing agent might be a way to avoid this dual agency problem. Any insights from the BP community would be greatly appreciated.

Tyler Barranger · Answer

Hey Tyrrell,

Seems that is more common for larger apartment buildings and not common with 5 units and under. I understand apartment sellers do not want the tenants bothered and most likely will be sold in-house or dual agency. However, with a 5 unit property, you are able to speak with each tenant personally and market it as you like. I've always had a hard time with dual agency, when you are representing both the buyer and seller who knows who's best interest you have in mind. I would recommend finding a smaller firm and be very up front with the listing agent that you do not want duaL agency.

Tyrrell Levine · Answer

Thanks for the quick reply! From the seller's point of view, do you recommend trying to avoid dual agency? It seems quite harmful to both the seller and the buyer, but great for the agents.

And do the smaller listing agents also operate this way?

Russell Brazil · Answer

Most of the strictly commercial guys in the DC area will try to keep it in house. Then they might put it on the mls, but they do so with a 1% coop, so no agents from other firms will show it to their clients since it is below their minimum.

Dual agency mischief in commercial real estate?

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