Buyer Loyalty
For every buyer a commercial real estate broker works with, we come into contact with another dozen “pretenders”. Buyer loyalty is critical to an effective transaction. A Buyer also wants the commercial real estate broker’s loyalty to the Buyer as their client.
Definition: Pretenders use the Broker’s time and effort only to glean information from them and feel no buyer loyalty to buy a property. During the Broker engagement with the Buyer, the buyer will receive typically multiple potentials. Without a representation agreement in place it is easy for a pretend buyer to cut a Broker out of a commission.
This approach is not the way to establish a solid mutually beneficial relationship with a commercial real estate broker. For best results, a professional broker establishes loyalty bi-bidirectionally which is critical. Overall when a Buyer is loyal, your Broker will see you as a viable client who will provide them business and potential referrals. With this in mind, you can expect to get “preferential treatment” and top of mind. It also will help you be the first to learn of great deals in the market place as they get listed.
Law Of Agency
Within the realm of agency relationships, there are 2 types of people to be considered. The first is a “Customer” customers are not represented by an agent or Broker. Customers can receive information and assistance from a licensed Broker or Agent in the State of Texas.
Second Type of Buyer
The second is a “Client” defined as a person whom the Broker has agreed to represent and is usually cinched down using a written representation agreement. Once an agency is established with a Client, there is a fiduciary in place. A fiduciary is where a person has a high duty of care of another person which is the Client.
Fiduciary
A fiduciary requires the Broker to place the interests of their Client above their own interests. Although the Broker will expect Buyer loyalty, the licensee owes a duty of honesty and fairness to all parties in the transaction. This includes leasing or purchasing commercial property. By law, at the first substantive dialogue with a client or prospect, the Broker should provide Information About Brokerage Services. This document is a written statement containing the statutory information relating to brokerage services.
The substantive dialogue is a communication between both parties be it a meeting or written communication that involves a substantive discussion regarding a specific real property. Shire Commercial utilizes representation agreements that state clearly in writing the relationship between the Buyer and the Broker so there are no miscommunications involved.