5 misconceptions about working with a commercial broker
Here are five of the most common misconceptions I hear from business owners when they're considering working with a broker.
“We don’t need advice, we’ve done this before.”
The truth: When tenants are represented by qualified real estate advisors, it gives the impression to landlords that they’re serious about relocating, motivating the landlord to offer the most competitive rate in order to secure or retain them. In other words, even if you have the experience, having representation will still help you get the best deal.
“I have a good relationship with my landlord. They provided me comparable deals done in the market.”
The truth: Landlords will only cite comparable leases that are most favorable to them. In order to receive a complete view of market activity and trends, you need a trusted real estate advisor who represents your interests who can find comps that will get you the fairest deal.
“I don’t want to go through the hassle of hiring a broker when I know I’m just going to renew my lease.”
The truth: A real estate advisor actually minimizes the hassle of lease negotiations while also generating leverage to drive a fairer transaction. Even though the goal is to stay where you are, when the landlord sees you're seriously considering all of your options, thanks to your broker, they're usually a lot more willing to give better terms.
“I don’t want to pay to use a broker.”
The truth: You don't need to. The landlord’s budget includes brokerage fees within their rent structure. If a tenant represents themselves, the landlord typically allocates the fee budgeted for the tenant broker to the owner’s agent, the asset or the property manager. It costs you nothing extra to use a broker.
“The landlord says my rent will go up if I have representation.”
The truth: Full commission is accounted for regardless if the tenant has representation, because either the landlord’s broker or the landlord receives the full fee, whether or not the tenant’s interests are represented. The reality is that in all instances a good real estate advisor will save more money than the commission.