A broker is a broker, right? Wrong. There are important differences between a tenant broker and a listing broker. In this post, we’ll cover those differences and what they mean for commercial real estate professionals.
Why? Because it’s important to know who to contact when you want to operate in this industry. But, from asset services to investment services and project management, there are a lot of professionals working in a lot of different specialist areas.
The choice can be confusing. So, it’s important to find the right person to help you out.
What is a tenant broker?
A tenant broker handles the tenant side of a commercial real estate transaction. They are sometimes called a tenant representation broker, a tenant advisory or corporate services. But all these terms cover the same basic roles and responsibilities.
A tenant broker essentially assists the tenant across the entire leasing process, facilitating the transaction between landlord and tenant.
They can give you advice on your proposed relocation, help you find the right place for your needs, secure that space, ask questions and negotiate on your behalf, and assist you as you rent a space. They can also guide you through the paperwork and closing process.
What’s more, they can help you find financing options, make sure any potential properties meet your requirements and coordinate any property viewings.
In short, a tenant broker can help you search for a property, make an offer and secure your chosen property.
What is a listing broker?
A listing broker lists properties for the landlord. They essentially work with the landlord at every stage of a commercial real estate transaction. They may sometimes be referred to as the seller agent or the listing agent.
A listing broker completes a range of tasks. They set a competitive price for your property, then market it to bring in potential tenants and, eventually, lease it.
The listing broker will also handle any property viewings and open houses and screen any potential tenants by checking their credit scores, for example.
Why use a tenant broker or a listing broker?
A tenant broker and listing broker are essentially two sides of the same coin. While one helps the tenant throughout a commercial real estate process, the other helps the landlord.
But, whether you need a tenant broker or listing broker, they understand the intricacies of the commercial real estate industry. Thanks to their expert knowledge of the local market, these brokers can help you expedite your sale and get a competitive price for your property, whether you’re renting or leasing.
What’s more, by forging this business relationship, you will benefit from a partner who can support your commercial real estate endeavors in the years to come.
Can a listing broker also represent the buyer?
The simple answer is yes, they can. A listing broker, representing the landlord of a property, can also represent the tenant. But only to a certain extent and only in certain States.
This arrangement is called a “dual agency” sale and, often, involves two brokers working for the same brokerage firm. It’s very rare for one individual to act as both the listing and tenant broker.
While proponents may argue that a dual agency improves communication during a commercial real estate transaction, there are disadvantages. Namely, this arrangement can lead to conflicting interests, reduced representation and is sometimes regarded as an unethical practice.
Furthermore, it’s illegal in eight states, including Alaska, Colorado, Florida, Kansas, Markland, Oklahoma, Texas and Vermont.