I might just be dealing with a particularly bad commercial broker right now, but he is all about covering his behind and refusing to do anything beyond his bare minimum, that is to say, the only thing he's ever told me about phase 1 ESAs is a piece of paper detailing my responsibilities in general. Which, well, my lender and other people have already told me about. He also told me to go figure out all the other legal issues on my own with someone who specializes in commercial real estate law. I actually did do this with more than one lawyer prior to submitting an offer, and I ended up having a 4 hour long fight with the broker over changing some wording, only to get lectured at the end about how I need to learn to not change legal documents written by lawyers and how I should be leaving all the paperwork to the grownups because I was a 20 year old female sitting in front of him eating frozen yogurt...wait, we were having lunch and it is my corporation of which I have a controlling interest in that's buying this property and it is my bank accounts funding the majority of the purchase price, right?! I think I just stared at him and didn't sign anything until he conceded. He tried to lie his way into making me initial parts of the offer that were clearly voluntary as well. I'm extremely tempted to file some complaints...
So I honestly do see a market for a Redfin-esque service for commercial real estate and even buying/selling businesses. If only to get rid of that nonsense.
I agree the guy sounds like a condescending ass, and I think maybe you should file a complaint.
That said, he MAY have a point about changing the wording on the legal document. Most states have had strict laws about real estate professionals changing the wording on contracts since the '50s or '60s, believe it or not. In most states, brokers and salespersons are only allowed to fill in blanks on printed form contracts that are 'customarily used' (usually defined as drafted or pre-approved by the local bar association) and to insert or delete items only at the direction of the principal in the course of negotiations. While the last part sounds like it allows what you want, it is very easy for the broker to get sued for doing these insertions and deletions, because almost anything they say when this is happening can be construed to be the "unauthorized practice of law." And when I say "get sued" I don't necessarily mean by you. It was complaints and lawsuits from bar associations that led to these restrictive laws...the attorneys didn't want more competitors for basic services, just like they have sued internet companies that are selling legal documents such as wills. Anyway, many brokers are advised to completely avoid changing the wording on contracts. E&O insurers sometimes even write stricter guidelines brokers have to follow in these matters in order to get covered under insurance policies. And the broker's company may also have its own policies.
BTW, depending on where you're located, there ARE companies that are more on the Redfin end of the spectrum and that have Loopnet-ish sites.
Most of the changes were not really about wording, more about the timeline on which certain contingencies were supposed to be met and which boxes should have been checked, which were just mostly blanks on printed forms. The biggest one though and the one that bothered me was a wording change to a contingency involving financing that everyone that had seen the document except for the broker had told me was just not something I could do as-written. I wanted it changed. If he had been upfront about his reluctance to change it because he was trying to cover his ass, that would have been great. If he had just let me change it like I did eventually because I wasn't going to sign anything otherwise, that would have been great. It's really the 'condescending ass' part and that we took (in all, over) 4 hours arguing over a single line that really annoyed me because it was not necessary...or at least, he couldn't explain why he didn't want it changed at all.
Anyway, I'm in southern california. I've found plenty of loopnet-ish sites, but none that are like redfin for commercial property or businesses...
One of the issues with having a commercial or business broker acting like Redfin is that there are different laws about compensation for commercial real estate than there are for residential real estate. (Commercial agents and brokers have more rights regarding how long, how much, and under what circumstances they are to be paid, for example. This is, for the most part, to protect brokers since these deals are much more complicated and they can potentially invest months of their time and hundreds of thousands of dollars marketing a property or doing due diligence, only to have the deal fall through at the last minute.) In any case, there is more legislation you would have to get around to do a commercial Redfin. I know of a few companies that have tried, but they all went out of business because of expenses or legal issues.
BTW, most consumers don't realize it, but there are roughly a dozen states that have made it illegal for brokers to offer rebates to consumers AT ALL, whether residential or commercial. Sometimes it isn't the real estate companies themselves that are stifling competition and innovation.
Heh, thanks again. I had no idea that was actually the case with regard to legislation... a commercial Redfin was just one of my random ideas where I was wondering why nobody was doing anything given the kind of interest there might be in such a service. Now I know the possibly unfortunate answer :(
Ouch! That guy sounds like total asshole, to say the least! Definitely not doing his job and does not deserve your time and business.
My experiences with commercial agents has been relegated to the broker that we have been using for over a 10 year period.
I agree though, a redfin type service will also evolve and take shape for commercial properties. However, from the commercial side of things, a lot more due diligence needs to be done (depending on the property type) as opposed to buying a home. And often times many 'good' commercial properties never make it to a listing service like loopnet etc.
I wish I could ignore him and deal with someone else but there's a whole culture of exclusivity that seems to exist around these things. Not to mention it's hard to find anyone better in the first place, since they all seem to be the same give or take very little. I'm willing to deal with him for the property in question though, it's just that good.
Redfin for commercial real estate would be complicated pricing and service-wise because of what you mention and more issues unique to commercial deals, but I think it could have as big of an impact as Redfin itself has had for residential homes.
And oh, loopnet+something like redfin? That would be amazing...
Comments
I might just be dealing with a particularly bad commercial broker right now, but he is all about covering his behind and refusing to do anything beyond his bare minimum, that is to say, the only thing he's ever told me about phase 1 ESAs is a piece of paper detailing my responsibilities in general. Which, well, my lender and other people have already told me about. He also told me to go figure out all the other legal issues on my own with someone who specializes in commercial real estate law. I actually did do this with more than one lawyer prior to submitting an offer, and I ended up having a 4 hour long fight with the broker over changing some wording, only to get lectured at the end about how I need to learn to not change legal documents written by lawyers and how I should be leaving all the paperwork to the grownups because I was a 20 year old female sitting in front of him eating frozen yogurt...wait, we were having lunch and it is my corporation of which I have a controlling interest in that's buying this property and it is my bank accounts funding the majority of the purchase price, right?! I think I just stared at him and didn't sign anything until he conceded. He tried to lie his way into making me initial parts of the offer that were clearly voluntary as well. I'm extremely tempted to file some complaints...
So I honestly do see a market for a Redfin-esque service for commercial real estate and even buying/selling businesses. If only to get rid of that nonsense.
I agree the guy sounds like a condescending ass, and I think maybe you should file a complaint.
That said, he MAY have a point about changing the wording on the legal document. Most states have had strict laws about real estate professionals changing the wording on contracts since the '50s or '60s, believe it or not. In most states, brokers and salespersons are only allowed to fill in blanks on printed form contracts that are 'customarily used' (usually defined as drafted or pre-approved by the local bar association) and to insert or delete items only at the direction of the principal in the course of negotiations. While the last part sounds like it allows what you want, it is very easy for the broker to get sued for doing these insertions and deletions, because almost anything they say when this is happening can be construed to be the "unauthorized practice of law." And when I say "get sued" I don't necessarily mean by you. It was complaints and lawsuits from bar associations that led to these restrictive laws...the attorneys didn't want more competitors for basic services, just like they have sued internet companies that are selling legal documents such as wills. Anyway, many brokers are advised to completely avoid changing the wording on contracts. E&O insurers sometimes even write stricter guidelines brokers have to follow in these matters in order to get covered under insurance policies. And the broker's company may also have its own policies.
BTW, depending on where you're located, there ARE companies that are more on the Redfin end of the spectrum and that have Loopnet-ish sites.
Thanks for the interesting response.
Most of the changes were not really about wording, more about the timeline on which certain contingencies were supposed to be met and which boxes should have been checked, which were just mostly blanks on printed forms. The biggest one though and the one that bothered me was a wording change to a contingency involving financing that everyone that had seen the document except for the broker had told me was just not something I could do as-written. I wanted it changed. If he had been upfront about his reluctance to change it because he was trying to cover his ass, that would have been great. If he had just let me change it like I did eventually because I wasn't going to sign anything otherwise, that would have been great. It's really the 'condescending ass' part and that we took (in all, over) 4 hours arguing over a single line that really annoyed me because it was not necessary...or at least, he couldn't explain why he didn't want it changed at all.
Anyway, I'm in southern california. I've found plenty of loopnet-ish sites, but none that are like redfin for commercial property or businesses...
Ah..understood. He was in the wrong.
One of the issues with having a commercial or business broker acting like Redfin is that there are different laws about compensation for commercial real estate than there are for residential real estate. (Commercial agents and brokers have more rights regarding how long, how much, and under what circumstances they are to be paid, for example. This is, for the most part, to protect brokers since these deals are much more complicated and they can potentially invest months of their time and hundreds of thousands of dollars marketing a property or doing due diligence, only to have the deal fall through at the last minute.) In any case, there is more legislation you would have to get around to do a commercial Redfin. I know of a few companies that have tried, but they all went out of business because of expenses or legal issues.
BTW, most consumers don't realize it, but there are roughly a dozen states that have made it illegal for brokers to offer rebates to consumers AT ALL, whether residential or commercial. Sometimes it isn't the real estate companies themselves that are stifling competition and innovation.
Heh, thanks again. I had no idea that was actually the case with regard to legislation... a commercial Redfin was just one of my random ideas where I was wondering why nobody was doing anything given the kind of interest there might be in such a service. Now I know the possibly unfortunate answer :(
Ouch! That guy sounds like total asshole, to say the least! Definitely not doing his job and does not deserve your time and business.
My experiences with commercial agents has been relegated to the broker that we have been using for over a 10 year period.
I agree though, a redfin type service will also evolve and take shape for commercial properties. However, from the commercial side of things, a lot more due diligence needs to be done (depending on the property type) as opposed to buying a home. And often times many 'good' commercial properties never make it to a listing service like loopnet etc.
I wish I could ignore him and deal with someone else but there's a whole culture of exclusivity that seems to exist around these things. Not to mention it's hard to find anyone better in the first place, since they all seem to be the same give or take very little. I'm willing to deal with him for the property in question though, it's just that good.
Redfin for commercial real estate would be complicated pricing and service-wise because of what you mention and more issues unique to commercial deals, but I think it could have as big of an impact as Redfin itself has had for residential homes.
And oh, loopnet+something like redfin? That would be amazing...