7 Must-Ask Questions when Hiring

a Commercial Real Estate Broker

Small business owners know that the first major

commitment you will make, and can’t afford to mess up,

is taking out a lease for your business’ office or store

headquarters. If you can land a great commercial real

estate broker, you might free up even more capital in

those critical first months of your company’s inception.

Here are seven questions that you must ask before hiring

a commercial real estate broker that has your best

interest at-heart, not just one that is focused on their

commissions.

What is the most recent deal they are proud of

closing?

Open up with an easy question, but one that will require

some substance for the prospective broker to talk about.

This gives you some insight on how they structure deals

and the level of negotiating they are willing to partake in.

You want someone who will fight in your corner, not take

the easy way out. Some of the best agents out there can

work magic on things you may not even realize were

possible.

Are there any potential conflicts of interest?

You wouldn’t be asking them outright, but more of a

query to see if there are any other clients who are

looking in the same market, to the tune of competing for

the same storefront or office space. A competent real

estate broker would know this almost immediately, but

it’s good to be clear that there aren’t any conflicts of

interest that can interfere with your deal.

How many clients do they currently represent?

You want a commercial broker who doesn’t have a

problem finding work, but you also don’t want to be

sitting at the bottom of a very long list of clients.

Generally, you want to avoid someone who is desperate

for work, so if they do appear busy, ask them about their

schedule.

Do they outsource any parts of the job?

Don’t expect every commercial real estate broker to be

the negotiator, marketer, and the background-checker

for all of their deals. In fact, the most successful ones

will have a marketing partner or allow the firm to do it

for them, it’s very time-consuming. It’s good to know

what aspects of their job are handled personally to avoid

feeling distant.

Is there a fee, if yes, is it negotiable?

Firstly, you’ll want to know what, if any, fees will apply to

you as some brokers charge a fees to the buyers whereas

most of the commercial real estate brokers offer their

services for free to the buyers/ tenants as they get their

commission from the sellers. In case any fees apply to

you ask what the commission rate is and be sure that you

believe it is fair and standard in the market. Negotiate

with the broker while comparing his brokerage with

competition in the market. Beware, that lowest

commissions don’t necessarily have the best outcome.

What is a realistic scenario?

Can they give you an estimate on where and what you

might possibly be able to afford? If the agent is

confident in their own negotiating skills, they should be

able to give you some kind of prediction of what they

might be able to land. This is a good question to ask if

you’re interviewing multiple brokers over the phone.

Any additional business experience that might

help?

Having a well-rounded commercial real estate broker

certainly helps when negotiating deals in the business

world. Look for a broker that will try hard to meet

deadlines and financial goalposts that are crucial to the

success of your business. Commercial real estate should

never be approached the same way as residential real

estate, as it is more complicated deal to structure, so if

they primarily do residential then it’s best to move on to

the next applicant.

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