Poor experiences with previous brokers can leave potential buyers feeling hesitant about entering into a Buyer’s Brokerage Agreement with yet another commercial real estate firm. This apprehension leads to less business and opportunities for both buyers and sellers.
A written Buyer’s Representation agreement fixes this problem, by giving both the broker and the buyer incentive to work hard as it is mutually beneficial.
Benefits to the Buyers of Commercial Real Property
- The Buyer is not bound or obligated to purchase anything.
- The agreement is for a specified period time and often times covers only properties identified by the broker.
- The Buyer can negotiate to have the firm seek compensation from the seller only and not from you as the buyer.
- The buyer can also negotiate to have the firm not have any recourse against you for any unpaid commissions.
- The Buyers Brokerage Agreement can be terminated at any time.
- It establishes who will pay for any fees and/or commissions if a deal is consummated and can offer recourse to collect fees/commissions from the appropriate parties.
- The Broker is incentivized to “work hard” on the clients’ behalf; a broker’s time is worth as much as any other type of consultant (i.e. attorneys, accountants, architects, etc.); it adds a layer of accountability.
- The business relationship established by executing a Buyers Brokerage Agreement gives the Buyer/Client access to information she or he could not obtain on their own.
- It reduces the likelihood of being misled and/or misinformed by the seller’s agent.
- It can ultimately save the Buyer/Client valuable time and resources by having a Broker do the property search and market research for them.
The benefits of a written Buyer’s Representation allow Buyers to exercise their full potential while being assured their partners will do their part. Sellers have representation to protect their interests and Buyers should have the same.