Why Should I Have Broker Representation as a Buyer?

Why Should I Have Real Estate Broker Representation as a Buyer?

Listing brokers represent the interests of SELLER’s, not buyer’s.  It is sometimes possible for a broker to provide “dual agent representation” but if you consider the realities of this arrangement you’ll realize it’s nearly impossible for a broker to adequately represent both the buyer and the seller without having a conflict of interest.  Attorneys can’t represent both sides, why should real estate brokers?  A buyer needs their own representation through an experienced and trusted real estate broker.

Real Life Example:

Broker Representing Buyer

I receive marketing materials from many brokers trying to sell their net lease properties.  In a recent advertisement (directed to sellers), the broker highlighted they had just closed a single tenant net lease at a “National Cap Rate Record”, the buyer was “identified within one week of marketing through [their] national investor database” and it was a “1031 Exchange buyer [who] closed as originally negotiated.”  To state this in different, but similar terms: “I’m a great broker because I just sold this single tenant net lease property to a buyer that I found in our firm’s database; I sold my listing to them at a record price for the seller and I was able to sell it to the buyer without the buyer making any changes no matter what they discovered during their due diligence.”

First of all, I need to point out that I don’t believe this broker did anything wrong.  From the little information I have about this transaction it appears this broker represented his clients interests very well and was able to help his client obtain top dollar, but can you see how the buyer’s interests weren’t represented here?  The listing broker knew he was dealing with a 1031 exchange buyer who had time constraints.  How clued in was the buyer to other available properties?  Did the buyer know they were paying a record price?  Did the buyer understand that material issues which come up during due diligence should constitute a right to renegotiate the terms of the contract?  Real estate investors complete 1031 Exchanges to save money (on taxes), but if you end up paying a premium for the property because you aren’t adequately represented then is the tax savings even worth it?

Unfortunately, the above example is not unique.  I’ve heard and seen similar stories many times over the years which is why I will forever encourage every buyer to have their own broker representation through an experienced and trusted real estate broker.


For more information about why I ONLY represent buyers in purchasing net lease property, please visit the MaxVal Real Estate Representation page.

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