Real estate is a huge investment, so why would you trust an amateur to help you out?
A commercial real estate transaction can either catapult or cripple your business. As one the highest expenses of healthcare practices, a real estate negotiation needs to be handled by an expert. One small mistake on a lease or purchase can cost hundreds of thousands of dollars.
It is critical to have multiple options (whenever possible) so you don’t miss a good deal. Protect yourself and your business by identifying these five warning signs that you might be picking the wrong real estate agent.
1. The agent only shows you one property at a time
As a business owner, your time is extremely valuable. You should be looking at multiple properties and evaluating them simultaneously. This gives you leverage in your negotiations, back-up plans in the event your first choice doesn’t work out and a snapshot of the market in a competitive environment. Every landlord is different in their willingness to earn your business.
2. The agent is on the flyer of the space you are looking at
You are entitled to representation. If the agent you’re working with has a listing agreement with the landlord, their fiduciary responsibility is to maximize that landlords profit. They cannot represent the landlord and adequately represent your interests as well. Avoid conflicts of interest by signing an agreement with an agent that specializes in buyer/tenant representation.
3. The agent is asking questions about your business that are obvious to anyone who knows your industry
Questions like, “What do you want to offer? How long of a term do you want? And how long does your construction typically take?” These are red flags that demonstrates that they do not know your industry or the needs of your business.
Medical and dental offices have specific electrical and mechanical needs that need to be addressed up front or they could be very costly.
It’s also important to remember that if they don’t understand your business and industry, they can’t sell the landlord on your value as a tenant.
4. Reputable professionals in your industry can’t vouch for their experience
Building a dental or medical practice is a collaborative process between your equipment specialist, contractor, architect, lender and real estate agent. If your agent is not in sync with those professionals, it can turn your project into a nightmare.
5. The agent has listings in your desired market
If the agent has listings in the market you are looking in, they have a conflict of interest in representing you as a tenant or buyer and should be eliminated as an option to represent you. That agent is financially incentivized to push you toward their listings. Also, they have existing working relationships with landlords in your market. If negotiations get tough, is your agent’s loyalty with the landlord or you? You might miss the ideal property because it is listed by your agent’s biggest competitor.
Just like medical professionals specialize, so do real estate agents. You wouldn’t refer an endodontist to give your patient braces. The real estate agent who handles your transaction will impact the trajectory of your business for the next 20 years in either a negative or positive way. Choose wisely!