If you are new to commercial real estate, you may be wondering why you need a real estate broker.
It’s true, you could venture out on your own to find a place to move your office, sell your shopping center property, or lease 20,000 square feet for your second distribution facility, but you’d miss out on the benefits of having a seasoned real estate broker on your side.
First, let’s clarify how brokers help you.
What is a real estate broker?
“Real estate broker,” in general usage, is a generic term which covers generally three different professional classifications. If you are interested in the boring details, skip to the end of this article. For the remainder of this article, we will refer to your real estate professional as your “broker.”
Real estate brokers help you not only find and schedule appointments for you to view properties, but they can also negotiate on your behalf, prepare your offer, determine the market value of your property if you’re selling, communicate with sellers about offers, and assist throughout the entire closing process.
How much do they charge?
Brokers are usually paid a percentage of the property’s sale or lease price. The commission is typically paid by either the landlord or the seller as opposed to the tenant or buyer.
“Sellers and landlords might view commissions as an unnecessary fee, when the broker’s advice and time end up saving their clients’ money more often than not in the end,” says Coleman Tirone, an Associate at Trout Daniel & Associates LLC.
Brokers spend their days examining the market, talking to their network, staying abreast of local developments, and remaining clued into the ever-evolving real estate landscape.
Here are five additional benefits to hiring a real estate broker.
Gain insider knowledge
“Experience matters,” says Art Putzel, Principal and Broker at Trout Daniel & Associates. “The person that’s driving around and making calls off signs to see what space is available will miss the spaces that aren’t being openly marketed. They could be made available for the right tenant. Maybe a landlord could move people around or maybe the tenant is leaving in four months, and he hasn’t put the sign a up yet. Brokers have a lot of information that the average person driving down the street might not have access to.”
“The financial benefits and market knowledge that a broker brings to the table is valuable, especially in their specializations, like me in the self-storage field” says Tirone, “Having that knowledge at your disposal, as well as having someone fighting in your best interest is critical in all commercial real estate transactions. Additionally, off-market investment properties are often where sellers/buyers can gain the most value on deals and a significant portion of sales are done in this fashion. These deals aren’t being publicly advertised, or even advertised on industry websites like CoStar, but the right broker will know about them.”
Distance yourself from emotions
“Hiring a broker allows you to keep some distance during the transaction for you as the owner or the tenant. The broker can be the go between,” explains Putzel. “If you don’t have that, the tenant can put you on the spot expecting an answer right now to a question that you aren’t prepared to answer. If you’re the owner, it’s good to have somebody with experience in between. During a sale or acquisition, a broker also can conduct negotiations on your behalf and often help someone from saying something that hurts their stance.”
Get negotiating help
“A broker’s job is to bridge that gap, manage a client’s expectations, and make sure that everyone involved feels like they walked away with a good deal,” says Tirone. “Brokerage is about your people skills, your connections, market knowledge, and being able to think quickly on your feet. You want to be able to respond accordingly for your clients and help them make the best, informed decision possible. It’s not always easy to reach a compromise.”
Save time and money
“Brokers do most of the legwork during a sale or lease,” says Tirone. “So instead of reviewing letters of intent, leases, getting on the phone and talking to the other party to negotiate, you can bypass all of that. We’re kind of the middleman, brokering these deals. That’s part of what you’re paying us for–to free up your time and alleviate some of that stress.”
Build a long-lasting relationship
The best brokers continue to counsel clients and stay in touch long after the lease is signed.
“We strive to show our clients the true value we provide,” says Putzel. “We focus on building long-lasting relationships and doing the best possible job, so we can continue to work with our clients in the future.”
“We’re people that want to establish relationships and get to know each and every person that we work with and their needs, not just in real estate, but as people themselves,” adds Tirone. “We love doing business with people, and that’s part of the reason that many of us are attracted to brokerage. We get to meet people from all different walks of life.”
Get support in the Mid-Atlantic region
Are you ready to connect with a real estate broker to help you buy or sell a property in the Mid-Atlantic region?
The CRE professionals at Trout Daniel and Associates have more than 50 years of experience providing knowledgeable consultation and personalized service that help clients take full advantage of the real estate market and transform their businesses.
Contact us to learn more about how we can serve you.
Appendix: So Technically, What is a “Broker”?
We promised to explain what a “Broker” is. In most states, there are three classifications of real estate professionals – Salesperson, Associate Broker, and Broker. The “Broker” is the one who has had at least three years of experience and additional education (a 135-hour course), which teaches them how to run a real estate company. An “Associate Broker” is simply someone who has qualified to be a Broker, but who is not the Broker for the company (there is only one). A Salesperson has not had the formal course or taken the Broker’s examination.
Importantly, however, your salesperson may very well be more qualified and experienced than most brokers. Says Putzel, “Don’t be misled by the ‘Associate Broker’ or ‘Broker’ title – examine the depth and relevance of the experience of your representative. Two of my partners are both ‘salespeople’, and both of them have been involved in many times the number of transactions I have, even though I am “the Broker”.