There is a common complaint among multifamily buyers. These buyers complain of seeing the same listings over and over again from a barrage of brokers that do nothing more than push paper around, and yet these buyers do not realize how they are co-creating these conditions. They never really grasp that in order to improve the quality of their buyer-broker relationships, they must contribute to the solution through their own attitudes and behaviors in the market. There are a few common reasons why this is a challenge for some individuals and businesses:
- These buyers are used to a certain way of doing things and because of this; they do not know how to distinguish between brokers that add value to their transactions vs. brokers that expect compensation for merely making introductions.
- They treat all brokers the same including the ones who could have been a valuable resource to them, and to their businesses.
- They alienate good brokers by expecting them to invest significant amounts of time sourcing properties without any written assurance of compensation. This brings to mind a good question. Would any reasonable person work without the assurance of compensation? To be sure, it is as unreasonable and asinine as it sounds.
Serious buyers, listen up!
In order to improve the quality of properties you are receiving from brokers, you will need to change the dysfunctional relationship you have with them. Learn to recognize good brokers and realize that developing solid and enduring working relationships with them takes mutual consideration. Realize that sourcing off-market deals is a very time intensive activity. It is an activity generally reserved for trusted buyers. Even if a broker wanted to, they could not reasonably expect to invest the time it takes to source off-market deals for every single multifamily buyer in the market. To attempt such a thing would leave no time for anything else…no time for family, no time for friends, and no time for self.
The Way Forward…
For the reasons mentioned above, any professional broker with common sense—and an ounce of self-worth—is going to require a service agreement of some kind before engaging a project and investing any significant amount of time working on it; otherwise, they are gambling with–and wasting—valuable time. For a buyer to simply say, “bring me a deal first” is pure ignorance, because it imposes an unreasonable expectation on a broker to invest time without the assurance that the time is worth investing in the first place.
Here are four things multifamily buyers can do to improve the quality of their buyer-broker experiences:
- Learn how to recognize brokers that bring value to transactions, and remember that not all brokers are created equal.
- Be responsive to questions and requests for feedback—don’t leave them hanging. It’s just plain rude.
- Establish expectations of a working relationship in writing. Don’t leave it up to chance.
- Don’t expect a good broker to work without compensation, or at least without the assurance of compensation at close of escrow
Multifamily buyers have nothing to lose—except a barrage of stagnant and old recycled listings—and they have everything to gain including continued growth, prosperity, and loyalty from brokers that prove themselves to be a continuous valuable resource. It just takes a little mutual respect and professional courtesy to make it happen.