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What Questions You should Ask When Selecting a Commercial Real Estate Agent
Whether you are looking to purchase, lease or sell a commercial property the real estate agent is key to your success in the real estate transaction. You need to take time to assess the ability of the commercial real estate agent to achieve success and to select the right commercial real estate agent for you. Following is some information that is important to ask when considering hiring a commercial real estate agent:
The Real Estate Company and its Focus: Research the company on the internet. Are they specialized in commercial real estate and do they handle your property type. If the company or the agent appear focus in Residential real estate and dabble in Commercial real estate it is not a good omen.
Agency Relationship: You may be working with the commercial real estate agent or the commercial realtor but your legal relationship is with the commercial Broker of the particular firm. Any legal documents that you sign will be signed by you and the Broker. Different categories of agency require different duties from the real estate agent. Ask how they will be representing you? Typically the commercial real estate broker will be functioning as a Transaction Broker. However, you can also have a Single Agency Agreement or a Non Brokerage Agreement.
The person, not the company: Your legal relationship may be with the commercial Brokerage firm, but it is the individual commercial Realtor or commercial real estate agent that you will be working with on your project. In most cases the real estate agent that you work with is not on salary, but is an independent contractor who works on commission and is affiliated with a Broker. It is actually the broker at the real estate firm who will receive the commissions from a sale or lease. The Broker will keep a portion of the commissions and the rest will be given to the real estate agent. Spend time with the individual that you are considering hiring as your real estate agent and make sure you are comfortable with him or her. Look past the impressive suits and fancy company offices. You are dealing with an individual and you must be comfortable with this person.
Can the Real Estate Agent communicate: While you are interviewing the commercial real estate agent they are in fact selling their services. This gives you a good opportunity to see how well they communicate and if they will be the right person to sell on your behalf. Other factors you may look at is: Was the agent on time? Does they appear to be organized? Are they neatly dressed? Is the presentation hot air or does they seem knowledgeable, These factors all tell you a little bit about the person's Education. Like selecting a doctor or an attorney it is in your interest to do a little research on the person that you will select as your real estate agent. In Canada, once you have a real estate license a real estate agent can legally sell any type of property, even though he may have very little knowledge about a particular type of real estate. Its not any different in other professions. But you have to ask yourself if it would be in your best interest to consult with a dermatologist for your heart condition, even though the dermatologist is a licensed medical practitioner and is legally able to treat you. It is your right to ask your prospective agent what advanced education he has in commercial real estate.
Experience: Has your real estate agent handled a property like yours in the past. How many years has he/she been involved in commercial real estate. Are they flexible enough to adapt if you have special needs? What designations have they earned? Were they based on volume?
Ask what marketing Websites the real estate agent or Realtor® belong to: There is no single information network for commercial real estate. It is very important to access a broad cross section of commercial property networks to achieve success in commercial real estate. If you are Buying commercial Real Estate, you want you real estate agent to have access to all the properties on the market. If you are selling real estate you want your agent to achieve a broad exposure of your property. Ask your Real estate agent for the names of the commercial networks to which they belong. Write the names down so you can compare with other real estate agents that you may talk to. It is expensive for a real estate professional to belong to the good networks but membership makes a huge difference.
Fees: You’ll want to know what, if any, fees there are to you. Some ‘Buyer’s Agents’ charge a fee to the buyer. If you are selling your commercial property or leasing it out, you will be required to factor in a real estate commission. Ask what the commission rate is and satisfy yourself that it is fair and standard in the market. Remember that your commercial real estate broker will also be marketing to other real estate agents so that you get the maximum coverage of your property and he will have to offer a co-brokerage commission to other commercial real estate agents. If there is not enough commission in the deal for for other agents, you will be shortchanging yourself because it is not worth the while of real estate agents to bring their buyers or tenants.
Engagement Period: If you are selling your commercial property how long a listing period will the real estate agent require. Make sure that you have a termination date on your agreement. In fairness to the real estate agent you need to give him or her enough time for advertising to gain traction. Six months is pretty standard. You can evaluate after that date if the property does not sell.