BUYING COMMERCIAL PROPERTY
Commercial real estate agents and brokerages can offer several services for prospective buyers. They can act as a buyer’s agent, representing only you; as a dual agent to simultaneously represent both you and the seller; or as a seller’s agent or sub-agent to represent only the seller. Unlike some other brokerages, North Wake Commercial’s agents offer a choice of these services.
Buyer’s Agent
Duties to Buyer:
If the real estate firm and its agents represent you, they must:
Promote your best interests
Be loyal to you
Follow your lawful instructions
Provide all material facts that could influence your decisions
Use reasonable skill, care, and diligence
Account for all monies handled on your behalf
Once it has been agreed (verbally or in writing) that a firm and its agents shall represent you as your buyer’s agent, they are not permitted to disclose any confidential information about you to sellers or their agents without your permission. Avoid telling the agent anything you would not want a seller to know until you make this agreement.
Unwritten Agreements: A written agreement is helpful for clarifying the relationship between you and the real estate firm, and setting out what the real estate agent will do for you. Some firms represent and assist you as a buyer’s agent, for a time, without a written agreement. However, a formal written agency agreement is necessary when making an offer to purchase a property. Without this signed agreement, the agent cannot represent or assist you, and is no longer required to withhold confidential information about you. If you later purchase the property through another firm, the agent who first showed you the property may seek compensation.
Be sure to read and understand any agency agreement before you sign.
Services and Compensation:
Whether you have a written or unwritten agreement, a buyer’s agent will perform several services for you. These may include helping you to:
Find a suitable property
Arrange financing
Learn more about the property
Promote your best interests
With a written agency agreement, the agent can help you prepare and submit a written offer to the seller. A buyer’s agent can be compensated in different ways: you can pay them out of your own pocket, or the agent may seek compensation from the seller or listing agent first and then require you to pay if the listing agent refuses. Be sure the compensation arrangement you have with your buyer’s agent is spelled out in a buyer agency agreement before you make an offer to purchase property. You must carefully read and understand the compensation provision.
Dual Agent
In a ‘dual agency relationship’, an agent or firm is permitted to simultaneously represent both you and the seller. This is most likely if you become interested in a property listed with your buyer’s agent or the agent’s firm. If you have not already agreed to a dual agency relationship in your (written or verbal) buyer agency agreement, your buyer’s agent will ask you to sign a separate agreement allowing them to act as agent for both you and the seller. It can be difficult for a dual agent to advance the interests of both the buyer and seller. Nevertheless, a dual agent must treat buyers and sellers fairly and equally. Although the dual agent owes them the same duties, buyers and sellers can prohibit dual agents from divulging certain confidential information to the other party.
Some firms offer a form of dual agency called ‘designated agency’. In this case, one agent in the firm works with the seller and another agent with the buyer, to enable fairer representation for both the buyer and seller. A dual agent’s loyalty is divided between parties with competing interests, so it is especially important to understand:
What your relationship is with the dual agent
What the agent will be doing for you in the transaction
Seller’s Agent Working with a Buyer
You can still work with a firm or its agents even if they do not offer buyer agency, or if you don’t want them to act as your buyer agent. However, in this case, they will act as the seller’s agent (or ‘sub-agent’). The agent can still help you find and purchase property, and provide many of the same services as a buyer’s agent. The agent must be fair and provide you with any ‘material facts’ about properties (such as a leaky roof). But remember: the agent represents the seller, not you. Their interests are, therefore, to obtain the best possible price and terms for the seller’s property. Furthermore, a seller’s agent must give the seller any information about you (even personal, financial, or confidential information) that would help the sale of the property. Agents must tell you, in writing, if they are seller’s agent before you say anything that might help the seller. Avoid saying anything you would not want to the seller to know until you are sure that an agent is not a seller’s agent. Sellers’ agents are compensated by the sellers.
BUYER SERVICES
Property Identification and Selection
Requirements Analysis
Property Research & Data Gathering
Initial Screening & Presentation
Offer Preparation and Management
Research
Negotiation
Evaluation
Due Diligence Support
Environmental
Governmental
Financial
Buying Process
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