The Two Faces of Dual Agency

A stone with two faces carved into it

In the world of commercial real estate, it is common for a listing agent to sell a property to a buyer who is happy to represent himself, thus the agent would be entitled to the entire brokerage fee. This frequently happens because commercial buyers are typically savvy about the process, and comfortable with its “buyer beware” environment. But, in the residential world, this is rarely the case, although a surprising percentage of buyers brush aside the opportunity to have a buyer agent represent them, be their advocate, their “bad cop”, and their research resource.

Don’t Give it Away

The exterior of a large, modern home with the sky reflected in the windows

If I had a nickel for every time I heard “not gonna give it away!” I’d have enough to retire. That expression always comes from the homeowner based on whispers and third-hand information, rarely from actual sales data. More often than not, homeowners divine the price they think their house is worth, perhaps to recover renovation costs or a refinanced mortgage, and that becomes their target sales price.

What is “Due Diligence”?

A girl studying

When you buy a house, or even a banana, you are supposed to do this: due diligence. How “diligent” you are lowers your risk in the purchase, and determining what is “due” forms the list of questions that need to be answered. In the case of a banana, your due diligence is simple – if fruit flies are circling, you’ll pass. For a real estate investment, conducting thorough due diligence using trusted experts is a must. Even then, there are always things that can be missed. But, the large items – the roof, HVAC systems, etc. – should be looked at carefully.

Buyers Beware

A person taking five dollars out of their wallet

Buyers of real estate are empowered by the internet’s ability to view properties in great detail, and this has enhanced if not replaced the real estate agent for the purpose of finding properties to consider, especially in the current social-distancing environment. They often call the listing agent directly to ask questions and schedule showings, which is their right. But, it is a mistake to assume a buyer’s best interests are equally well served by the listing agent whose loyalty is exclusive to the seller.

What Is A “CAP” Rate?

A commercial building in New England

What separates residential property value from commercial is the economic performance. Residential has none, and commercial has nothing but. As investments, residential property is pretty lousy – no offense to readers who are homeowners – I am one too. But, look at your home purchase and its ROI (return on investment) after 10 years.

Buyer Agency Puts Buyers on Equal Footing

A statue of a cowboy with a gun

In 2005, the Maine Real Estate Commission introduced “buyer agency”, a way for buyers to be professionally represented with an exclusive buyer agency agreement. This service is free and levels the playing field between buyer and seller in the process of buying real estate. The seller pays a “co-broke” fee to the buyer’s agent, and for that fee, the buyer agent is duty-bound (with a signed buyer agreement) to keep all information confidential, explain contracts, disclosures, review buying options, and pitfalls and advocate for the buyer’s best interests.

Why A Multi-Family?

A row of red brick townhouses

As the baby boomers gather into retirement, a significant portion doesn’t have savings to carry them through their elder years. Many will rely on investments that provide a safe but paltry income of 3-5%, or a risky but enticing income of 10-15%. The bottom line is: to get a decent return on your investment, you sacrifice safety. There is a very attractive alternative: the multi-family investment.