Five Tips On Hiring a Commercial Real Estate Broker
When it comes to hiring a commercial real estate broker, basing your selection on a nothing more than personality or an agent or brokerage’s persistence is one of the biggest mistakes you can make. Fast decisions can have long-term consequences, so it’s a good idea to start the process early and take your time. You want to hire someone who will be on your side, someone who is knowledgeable, ethical, and willing to fight for every dollar in a sale or acquisition. Make sure that you are looking at agents who have a track record of successful deals and have the experience and financial stability to put your best interests first.
Here are five areas where details matter, and the more information you can gather at the front end, the less headache and potential frustration you will have during the search/transaction process:
1. Set the stage
Before hiring an agent, do your homework. Ask candidates to provide a complete resume: Look for tenure, specialties, education, time with firm, properties represented (potential conflicts), key milestones or projects, references and industry accreditation. Ultimately you want to interview prospective agents just like you would any other job candidate or service provider.
2. Verify their methods
Ask for at least three case studies of transactions similar to yours. Ask the agent to include the client name and contact info, the deal terms and business case for the client. Then do your homework. Call and ask the CEO’s measurably benefitted from the broker’s strategy. Ask about follow up, duration of engagement, listing steering, commission transparency, and creative solution offerings. This is a vital step in separating fact from fiction. Third-party vetting firms like PlaceValue can help with this if you lack the time or inclination.
3. Look at the details
Ask a potential agent for a detailed listing of properties, including those represented by the brokerage, that fit your requirements. Of those properties, ask the agent to detail the commission arrangement as well as any contractual modifications that could benefit you, including: tax benefit shifting and structure, financing, tenant improvement structure, lease flexibility, financial exposure, and term and deal structure.
4. Talk about money
Ask the agent to detail any and all services for which they are willing to guarantee your satisfaction as a precondition of payment of commissions. Verify the agent is willing to sign a financial transparency agreement (certifying fees and back-end funds from vendors and brokerage captive entities). And be sure to ask the agent to participate in an equitable fee sharing arrangement.
5. Watch out for red flags
Look carefully at an agent that may be putting his interests above yours. If you are only being shown properties that he has advertised or listed for lease or sale and not those advertised or listed by other owners or agents, or if you are only shown properties that pay him the most commission regardless of whether there are other properties that might be of interest to you, it might be time to look for another agent.
A well-vetted broker is your first step towards creating a workplace that improves productivity and reflects your values and goals. As a leading independent planning, procurement and project management firm, PlaceValue helps our clients realize today’s high performance, adaptable work place, objectively and without bias. By aligning business workplace design with business strategy, managing the supply chain for maximum value, integrating project delivery, and leveraging our buying clout, we bring our clients immediate cost savings and long-term return on workplace investment. Our independence, world class process and pricing transparency, ensure the best possible outcome for your new workspace.
PlaceValue’s broker vetting services are the industry gold standard and are paid from commission fees, so there is no charge to you. Call to speak with our broker vetting specialist.
For more information about hiring a broker, download our free report Broker Selection Best Practices.
Not only will it help you find the right broker for your needs, it will make sure you know the right questions to ask along the way, to ensure the best possible outcome on your commercial space needs, office or industrial.