Aways Be Represented in a Real Estate Transaction

Years ago I wanted to invest in real estate so I asked around looking for someone to help me find investments and represent my interests. Those that were recommended to me offered listings they had or offered their own investments. I soon discovered that nobody represents the buyer they all represent themselves or the seller. This is traditional in the real estate business as the training given to agents are to list properties because if you don’t have inventory you have nothing to sell. That is true.

What I did was not traditional and I made my own rules by building relationships with investors and replacing the necessity of having inventory by having loyal clients. This not only created steady buyers, but created inventory to sell or exchange later.

I decided to enter the real estate business and focus on Commercial Properties. Many agents told me to focus on homes as that was the bread and butter of the business. But I just didn’t want to compete with the majority that are showing homes on weekends and working the phones in the evening. I plunged full speed ahead with commercial because I liked it and took many educational courses to learn the business. I starved for about 5 years, but then I became associated with heavy weights in the business and gained their respect. These broker contacts helped me finding inventory for my clients. I developed clients and became very successful with this niche.

The Buyer’s Representative would share in ½ of the commission. or better yet a buyer could pay the agent a fee when he/she performed. Deducting ½ of a commission from the price to compensate for the commission that they would normally receive.

This became a large business for me because I would monitor my client’s investments after their purchase. I would meet with the property manager once a week and due a review of the investments he was managing. My partner and I spent so much time doing this that we decided that we should form our own management company and get paid for our time that we were spending. This we did and that is how I got into the management business.

People should be represented in a real estate transaction. There are commercial firms that contract with chain stores, restaurants, and others to find sites and represent them in a commercial lease.

Mom and Pop businesses are usually not represented in commercial lease negotiations and they pay for this inexperience. Residential tenants probably should be represented also, but available rentals would dry up because the owners or property managers would shun anyone representing them.

New or veteran investors need representation. I know veterans will think “I can negotiate for myself.” The problem with this is sellers and seller agents can read through actions, comments, and facial expressions how to negotiate with you. With an agent you can be hide your true motives even from the agent representing you. Never tell the agent everything or he/she may accidently tip your hand. Hold your cards close to your chest and USE PROFESSIONAL REPRESENTATION.

No matter if the Realtor is your best friend he/she must by law represent the seller if presenting a listing of a seller. The law states that the Realtor has a * fiduciary relationship to the seller.

FIDUCIARY: Holding or held in trust. Trustee
If they appear to be representing you then they are violating the law. The Realtor cannot disclose the seller’s negotiation strategies or what price he/she may agree to. That is why I keep recommending that you hire a Buyer’s Agent. You can negotiate a fee or the agent can share the seller’s Realtor fee. Sign a contract with the BA and you are officially represented. The BA can reveal anything he knows about the seller’s strategy and weak areas. He/she may be in a position where the seller has to sell. We used to identify a seller by these two motivating factors.” WILL SELL” which means the seller will sell if they get their price or terms and the “WANT TO SELL” which means that the seller is motivated to sell for some reason. A BA can do a little detective work to find out about what type of seller you are dealing with. This is a major advantage of using a BA. The Seller’s Realtor has not developed the techniques of a BA because they haven’t had the experience or training. They have taken the typical Realtor training of farm for listings, advertise and sell.

I will repeat do not buy Real Estate especially in a strange town unless you have representation. My background before becoming a property manager was as a representative of investor buyers. I have been in the real estate business 44 years. I don’t perform this service anymore, but am sharing with you the facts of the real estate industry. I am not condemning the seller’s Realtor because they have to disclose this to you, but most people don’t realize that you should be represented. That representation is by another Realtor that specializes as a Buyer” Agent.