Don’t Hire Your Landlords Agent When Negotiating a Lease or You'll pay through the Nose

Phase One:—Don’t Hire Your Landlords Agent

Back in ancient times, when Toronto Commercial Real Estate landlords first built offices and warehouses to lease, they decided they couldn?t do the marketing of these properties all themselves. They hired Landlords Agents as Listing Agents to market space to prospective Tenants. These Landlord Agents, good businesspersons were desirous of repeat business. What better way than to fill the building at the highest rental rates for their landlord-employers? Consider what this means to you a lowly tenant even a lowly but large tenant. When there is a million feet in the building that the landlord pays commissions on, who do you think an Landlords Agent has allegiance to? When push comes to shove who gets the short end of the stick? So this is the first card that is stacked in the landlord?s scandalous deck or real estate cards. The listing agent wants a big piece of the commission pie and the landlord has it in his oven. Conflict of Interest Real Estate Inc.

J.R. is the head honcho at Conflict of Interest Real Estate Inc. J.R. is a traditional Landlords Agent. His company is one of big ones. You can see his name on buildings and in the newspaper. He sells land, buildings, shopping centres, apartment buildings, houses and anything else his Landlord clients own. And incidentally, he leases up space in these same buildings for these same Landlords.

He wines and dines them and they may even visit his home. They have a great relationship. But how does this affect you as a tenant? Well for starters, his company makes handsome commissions representing the same landlords, year after year. As sure as the day is long, landlords don?t keep hiring J.R. and paying them these huge fees because they get the best deal for you the Tenant.

So perhaps you should ask yourself ?What is he doing for me?? Many tenants do a lot of soul searching on this very subject after “their” agent puts them into one his own listings. Even worse, is when the agent gets a listing on the building as a reward for putting you into it It’s sort of scary, isn’t it?J.R. has become an out-sourced real estate department for the landlord. It cannot be any other way or he wouldn’t be hired time and time again by the same landlords.

He does an excellent job for them. But does he do such a great job for you? No matter whom you employ to represent you on your real estate transaction, you pay his commission. It?s built into your rental rate. There are no free rides. The issue really is, what are you getting for your money?

The Tenant Mandate—J.R. Eats The Whole Thing!

For J.R., being hired by the landlord was great but what happens if you didn’t like the building he has a listing on? Or what if one of J.R.?s competitors, who is promoting some other building calls you up and claims to have a better building and a better deal.

J.R. may be out of luck. You may end up working with that competing Agent or even a number of Agents. So J.R. had a brain wave— a marketing breakthrough of huge proportions and sheer genius. If you don’t like his listed building, why not get you to work with him exclusively under what is now called an exclusive tenant mandate? Under this arrangement, you work with J.R.’s company exclusively on your real estate requirement. Whether you take space in his listed building or any other building in the city, J.R. gets paid. J.R. gets to eat the whole thing!

It’s great for J.R. but how does this affect your pocketbook? I am biased because I work only for tenants and never take listings. In fact, “Advising Tenants, Not Landlords” is my corporate motto. Yet, another less biased authority says in Matthew 6:24 ?No man can serve two masters.? So who is J.R. Landlords Agent really working for?

He now has two signed contracts, minimum, on buildings that you are considering . One with you and at least one with one Landlord. I am assuming that only one of the buildings that you are shown is listed by J.R. Can he serve opposing parties fairly when the question of present and future listings hangs over his head?

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