Even Investors Should Always Be Represented!

Great story about being a Commercial Real Estate Investor:

Always Be Represented
By Lambert Munz

“I have been licensed 44 years with the CA Dept of Real Estate.

Years ago I inherited some money and was always interested in real estate. I asked around looking for someone to help me find investments and represent my interests. Those that were recommended to me offered listings they had or offered their own investments. I soon discovered that nobody represents the buyer they all represent themselves or the seller. This is traditional in the real estate business as the training given to agents are to list properties because if you don’t have inventory you have nothing to sell. That is true.

What I did was not traditional and I made my own rules by building relationships with investors and replacing the necessity of having inventory by having loyal clients. This not only created steady buyers, but created inventory to sell or exchange later.

I decided to enter the real estate business and focus on Commercial Properties. Many agents told me to focus on homes as that was the bread and butter of the business. But I just didn’t want to compete with the majority that are showing homes on weekends and working the phones in the evening. I plunged full speed ahead with commercial because I liked it and took many educational courses to learn the business. I starved for about 5 years, but then I became associated with heavy weights in the business and gained their respect. These broker contacts helped me finding inventory for my clients. I developed clients and became very successful with this niche.

There was one large commercial brokerage firm that would not cooperate with other brokers, but would list and contact investors for possible purchase. Their agents would come to me because I controlled investors and inventory and they wanted to represent me. I told them I didn’t need them and told them to go somewhere else. I reminded them that they didn’t cooperate with other agents and I am not going to cooperate with your them. I informed top management that if you don’t cooperate in the business then don’t send your agents to solicit me because we will not cooperate with you. These same agents would attempt to contact my clients direct and the clients would refer them back to me as their representative. This gave me great control in the business, but we earned it by taking care of our clients and their investments.

That particular company has since changed their ways and I believe it is due to my scolding and similar scolding by others in the business. Pragmatic thinking replacing greed.

This representation of investors was greatly needed because the typical agent represents the seller. The reason is because they pay the commission. However, good pragmatic thinking replaced greed. Agents realized that cooperating with each other would not only increase sales but would be a benefit to the client. “A HALF A LOAF IS BETTER THAN NONE.”

This way the Buyer’s Representative would share in ½ of the commission. Or better yet a buyer could pay the agent a fee when he/she performed. Deducting ½ of a commission from the price to compensate for the commission that they would normally receive.

This became a large business for me because I would monitor my client’s investments after their purchase. I would meet with the property manager once a week and due a review of the investments he was managing. My partner and I spent so much time doing this that we decided that we should form our own management company and get paid for our time that we were spending. This we did and that is how I got into the management business.

People should be represented in a real estate transaction. There are commercial firms that contract with chain stores, restaurants, and others to find sites and represent them in a commercial lease.

Mom and Pop businesses are usually not represented in commercial lease negotiations and they pay for this inexperience. Residential tenants probably should be represented also, but available rentals would dry up because the owners or property managers would shun anyone representing them.

New or veteran investors need representation. I know veterans will think “I can negotiate for myself.” The problem with this is sellers and seller agents can read through actions, comments, and facial expressions how to negotiate with you. With an agent you can be hide your true motives even from the agent representing you. Never tell the agent everything or he/she may accidentally tip your hand. Hold your cards close to your chest and USE PROFESSIONAL REPRESENTATION.”