When you initiate conversations with commercial real estate brokers, they will likely send you an exclusive agreement to sign. The most common types of agreements are:
These legally binding documents benefit you and your broker throughout the transaction. Here are a few reasons you should sign an exclusive agreement with a broker.
An exclusive agreement protects both you and your broker. The agreement clearly outlines each person’s responsibilities and steps to solve any problems that arise. Without this documentation, your confidentiality is not explicitly protected.
Likewise, brokers only get paid if they successfully complete your transaction, and a signed agreement ensures they receive a fair commission to provide for themselves and their families.
An agreement protects the work your broker puts in and ensures you receive better service. Brokers invest significant time and resources into helping you reach your commercial real estate goals.
If you’re a landlord or seller, your broker will spend money to market your listing through tactics such as:
If you’re a tenant or buyer, your broker will spend valuable time:
As mentioned, brokers defer their payment until after the deal is done. Without an agreement, they can’t ensure they receive a commission to recoup these costs. Commission payments also help pay for the broker’s team and technology they use to make your deal go as smoothly as possible.
You also receive a better return on investment by signing an exclusive agreement. Without one, there is no guarantee that a broker will do any of these tasks listed above. By signing an agreement, you demonstrate your commitment to getting a deal done, and in return, your broker will be 100 percent committed to you and will look out for your interests.
If you are working with multiple brokers or contacting listing agents directly, you can cause confusion for all parties involved. Landlords view you as a much more serious contender when you have a reputable broker by your side. Broker exclusivity also reduces redundancy and competition between the multiple brokers you have contacted. You will be on the same team as your broker and experience a much smoother transaction.
Don’t be surprised when your broker gives you an exclusive agreement and know that the document benefits you throughout your transaction.
If you’re looking for a broker, please contact our team to get started.