One of the most common mistakes a tenant makes when looking for real estate for their practice is to contact a listing broker to get information, and then inadvertently begin working directly with the listing agent or owner. The reason this can be such a costly mistake is because healthcare providers typically do not understand the dynamics of the relationships involved.
The listing agent has a “fiduciary relationship” with the owner of that property. That might sound like legal jargon, and that’s because it is legal jargon. The listing agent has a requirement to work on behalf of the landlord or seller in the transaction. That agreement places the listing agent on the exact opposite side of the table from you. They are effectively working against you in the transaction, specifically with several high-dollar business terms that have the ability to cost you or benefit you by tens to hundreds of thousands of dollars. Your interests are at odds with their legal obligation to help their owner make as much profit as possible and their real estate license is on the line. Simply put, the listing agent’s responsibility is to find a tenant, and in the process, help their client, the landlord or seller, make as much money as possible. They are not working on your behalf, or trying to help you find the best location for your practice, or to help you capitalize on the negotiations financially.
On the very first phone call about a property, the listing agent is evaluating your posture within the deal. Your tone, level of interest and experience all come into play. Any perceived weakness or inexperience can and will be used against you as a perspective tenant as the deal unfolds.
That might seem extreme, but you have to understand that the property you are interested in is the means with which the seller or landlord puts food on their family’s table. And it’s hard to blame them. Put yourself in their shoes. If you KNEW your house was worth $400,000, but someone was willing to pay you $500,000, wouldn’t you take it? Of course you would! The definition of a ‘Fair Market Deal’ can be boiled down to what a property is worth to a potential end user.
So if you call on a property with the wrong posture, it can end up costing you tens or even hundreds of thousands within the transaction.
“But what is the solution?” We’re glad you asked!
In the very same document that the seller or landlord signed with the listing broker to create the fiduciary relationship with them, the landlord also agreed to pay commissions. Those commissions are paid whether you have an agent or not. If you bring an agent to the table, the listing agent will simply split the commission with your agent. If you come to the transaction without an agent, the listing agent gets to keep the full fee and, in most scenarios, it’s a double commission.
At the end of the day, you are not saving money by coming unrepresented to a transaction. Without representation you lose the benefit of an expert advisor who has a legal obligation to protect your interests. They will work tirelessly to save you time, energy and to help you avoid costly pitfalls and complications; it could easily cost you six figures by not understanding your value within the market.