December 26, 2020
How to Interview a Buyer or Tenant Real Estate Agent
You’re in the process of finding new real estate to lease or buy. Once you have defined your ideals and then narrowed down the bare necessities for your real estate search, the next step is finding the right agent. Real estate agents specialize in geography, property types, and landlord or tenant representation. The goal of your agent search is to find an agent who is trustworthy and qualified to work with you, and then trust them to do their job. Here are 4 questions that you need to explore in order to find out if the agent you are interviewing is the right agent.
Agents worth hiring have specialties, no agent will reach the top of their field if they don’t. Look at their website, ask about their significant transactions. Are they similar to the real estate type that you need, be it office, manufacturing, warehouse, retail? Does the agent spend his or her time in your general geography? Do they mostly represent landlords or tenants? Do they work on sales or leases? Do they handle larger or smaller transactions? If your transaction size is smaller than the agent typically works on, find out if that agent will give your project the attention that it needs. If your transaction size is larger than what the agent typically works on, be sure they will negotiate the best deal for you rather than getting distracted by the commission.
You could hire someone without experience, and that may not be a problem, but you will want to be careful with what information you entrust to them, like your bottom line number, and which property is really your favorite. Inexperienced agents may rustle more bushes, but they also might be more motivated to get a deal done and potentially sacrifice your interests because they are inexperienced and need the commission. It doesn’t always happen, but just be aware of it. Another reason you want a specialized, experienced agent is because you also may need someone to vouch for you to the landlord if your credit isn’t great - an agent with experience and specialty has been here before and will have more creative ideas about how to help you structure a deal that would be acceptable to the landlord if your financials aren’t the best.
If your agent is qualified and has done many deals similar to yours, they should have recommendations for related vendors who help get deals done. Real estate agents are paid by commission and not an hourly rate or project fee, so they will be motivated to stay on top of contractors who may be slow, and they will, at least they should, have relationships with these vendors who want to perform because the agent is a source of new business for them. When you are interviewing an agent, ask them about their transaction team, do they have attorneys, roofers, environmental testing contractors ready to go when called upon?
This is the potential benefit of a more inexperienced agent, they may be more highly motivated to look under every rock and shake every bush to find you what you need, which you will need especially in a tight market. Many properties are listed on the different public listing services, but many are not. You need someone who will work hard to find those off-market opportunities. You’ll find their work ethic by observing. Are they maniacal about follow up? Do they waste your time on the phone? Do they write excessively long emails? Ask them what their process is to find you the right space and how they organize their information. Always remember, the way an agent does one thing is the way they do everything. Look at how they present in meeting, how they get back to you, and make sure they always do what they say they are going to do.
The 4 questions to ask when interviewing a tenant or buyer agent: 1) What is their specialty? 2) What is their experience? 3) Who is involved in their transaction team? and 4) Do they have a good work ethic? Find these answers, and you will find the right agent.
I’m David Skinner, and this is the CRE Coach where together you and I are lifting the hood on Commercial Real Estate.