Who does a broker really work for?
Whose side is a broker on? This is a question that all potential tenants should ask themselves. Hoping that an agent will help us choose the best property for us, we may expose ourselves to a nasty surprise.
When the game takes place on the commercial real estate market and there is a lot of money at stake, one need to be particularly vigilant.There is a tenant who is looking for office space. Regardless of whether he or she needs a small or large space, intended for the whole team or for a one-man business – a broker is “employed” to help.
Here we return to the question: for whom this broker really works?
From a tenant’s perspective, it looks like this: you need to rent some office space, you find a commercial real estate agency, and its broker helps you choose exactly the premises you need. Is that right? Yes, that is right. At least in theory. In practice, however, the remuneration of this broker will be a commission, which will be paid by a landlord – that is, the owner of a property (in many countries the standard is that the tenant does not pay commission). If the broker had the same commission from all renters and if all the premises offered by him or her were in a very similar standard and size – he or she could actually afford to be honest with a tenant.
However, reality is different
In fact, the broker has several “employers” – landlords, who entrust their real estate into his or her hands, so that he or she would make potential tenants interested in them. The aim of landlords is to fill buildings with tenants, therefore they try to “motivate” the agent with their terms of cooperation – mainly in the form of remuneration. If in such a situation, would the broker loyally inform the tenant that an air conditioning has not been fumigated for several years and some people in a building have allergies? Or maybe he or she would remain loyal to the landlord and, if nobody asks him or her directly, would prefer to not mention the issue of air conditioning? The answer is rather obvious – not all brokers will be guided by professional diligence.
Instead, they will often advise buildings for which they will receive the highest remuneration from a landlord, even at the expense of the quality of space, which will be received by an unaware tenant, who lives in the belief that he can be happy because he does not pay commission – first, he pays it in rent and, secondly, he loses a lot in that he does not know how the market works.
And traffic jams? Here, in this area? “You know, when I come here, it is always empty.” Parking place? “I have always seen at least a few free ones.” These are the answers that do not have to be lies, but they do not have to give the whole truth either.
We absolutely do not want to say that brokers are dishonest or that they are lying
But let’s not be enchanted either – from a broker’s perspective, a tenant is to rent first and only then to be satisfied. A broker will get a commission from a landlord regardless of whether a tenant will be satisfied or not. Any complaints will not be sent to a broker anyway, but only to a landlord: “why no one has told me before that air conditioning requires thorough cleaning ?!”.
And the commission is correct
All tenants should remember that a broker will present the property, but he or she will not necessarily help in choosing the most suitable one. An agent often recommends those on which he or she earns the most and those belonging to landlords that get along with him or her. In turn, tenants and landlords should remember that a broker is not a necessary side of the transaction.
To rent a space, only two sides are needed: a tenant and a landlord. The whole trick is to have the right tenant meet with the right landlord at the right time.
This is exactly in which the Realko24 platform helps – saving time and money on both sides. Also, the platform offers the same rules of cooperation for all landlords and maximally reduces the commission. Thanks to minimizing the costs of brokering, tenants have a chance for better rental conditions, and this is something that landlords will enjoy too.