Multifamily - Is it best to work with listing brokers only?

My partner and I are looking to invest in multifamily properties. I have been working with a broker who specializes in multifamily and seems to have a good knowledge of the properties in this area. She has shown me several properties, mostly listings by other brokers. My partner prefers to work with the listing broker only. Is either preferable, and why?
In Buying Property - Asked by Mar W. - Jun 14, 2010
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Answer(s)

Greg L.
Broker/Agent
Cypress, CA

That's a good question and there probably isn't a hard & fast answer. Listing agents are obviously looking to sell their property(s) and that can present a challenge that you
might not get the optimum search for the best property that meets your investment plans. As our team presents buildings it is focused on the Client and all of their specific circumstances that will define the "best type" of building for their goals.

Jun 15, 2010
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Alan C.
Broker/Agent
Suwanee, GA

A good question. Agency is a topic that has gotten a lot of attention in the past few years by the courts. There has been a lot of confusion about Agency by both clients and brokers. It depends upon your persective. The listing broker will almost always know more about the property. However, the listing broker is contractually bound to act as a fiduciary to the seller of the property. This means his loyalty is to the seller, not the buyer. This means that while he can negotiate for you, at the end of the day he may not have your best interests at heart. A buyer's broker may negotiate harder for you, since his loyalty is contractually to you. If the listing broker represents you, then he's performing Dual Agency. This is perfectly legitimate and legal, as long as you are made aware in writing that he ultimately represents the seller. However, Dual Agency can potentially be a minefield for a broker, as he is now serving two masters, with each master thinking they are the client. With Dual Agency, the listing broker will earn the entire commission, so the listing broker can sometimes offer you concessions if the negotiations get tight. A specialist is a good idea. You will needs someone who knows the financial ratios, real-world costs and realistic rental levels. Finally, do your own homework. Research the actual rental comps up and down the street you intend to buy on. Spend a few hours knocking on doors of tenants and ask what they pay for rent and if they received andy concessions. Some won't tell you, but many will.

Jun 15, 2010
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Eduardo B.
Broker/Agent
Weston, FL

A listing broker may be naturally biased towards his/her lisitngs. If you hire a competent broker to find the right property for you, it is more likely that you will be offered more options, and that your interests will be more forcefully protected.

Jun 17, 2010
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Cutting Edge R.
Broker/Agent
Decatur, IL

Listing brokers tend to know more about the property. But they work for the Owner. Buyer brokers work only for you and they can get any information you want from the Listing broker. They are more likely to ask for information the listing broker hopes you don't ask for. The rule of listing brokers is if buyers don't ask, then don't tell (unless material defect) Your buyer broker only represents you and your best interets.
Some states dual agency is illegal, so you must have your own buyers agent for the reasons mentioned above.

Jun 19, 2010
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Anne B.
Broker/Agent
Oakland, CA

Working with a broker that represents you is generally better than working with a seris of listing brokers. You Buyer'd Broker will be more likely to look out for your interest; the selling broker is primarily looking out for the seller's interest. As buying appartment buildings is a process, it is better to have one agnet who knows your needs and finacila situation.
Anne Bruff

Jun 22, 2010
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D D.
Broker/Agent
Irvine, CA

The best thing is to contract with a real estate professional that you have interviewed and trust and make sure you agree they will be compensated fairly whether a property is listed or not. Finding quality real estate will need research and turning over stones in many areas. From direct contact with lsiting brokers (the easy path and certainly effective) to lenders (note purchases can be a cost effective but tricky way to get good real estate).
One way is to buy a fractional interest such as a TIC interest and you can then gain control of the real estate with only a very small investment but when it is ready to be marketed you need to be ready too.
The net net is that buying quality real estate takes quality expertise and that my friend costs money. But it is moeny very well spent.

Jun 22, 2010
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Don M.
Broker/Agent
Oakhurst, CA

The listing broker represents the seller, not the buyer. Even though you might think the listing agent really cares about you, you can usually get a better deal when you hire an agent who will represent you and generally negeoiate a better deal and watch your back for hidden issues at the same time.
Don Mandy

Aug 13, 2010
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