Real estate agent puts commission at risk


Reader Question: I own a business and the property. I recently decided to close my doors and retire. I put a sign in the front window closing business. A Realtor came in and asked is the property for lease and could she bring a client down to look at it. After looking at it, the client was excited. The Realtor came in the next day and told me upon completion of the lease I would owe them a commission fee. As I never asked for their help, am I obligated? They approached me and not the other way around. At least once a month people come in and ask about leasing. I do not need any help. Thanks. Barry

Monty’s Answer: Hello Barry, and thanks for the question. Not being privy to the conversations between you and the agent there are three choices for you:

1. I suspect the law would favor your position. Property listing agreements for sale, or for lease, must be in writing in every state. If you do not want or need help, find another tenant.

2. This is a good position to negotiate fee with the agent. If you decided you want this tenant and the agent’s decision are negotiate or no fee, the fee may turn out to be a smaller consideration. Apparently the agent was allowed to show the property. Leasing to them could be considered a moral obligation. This number 2 would be my first choice.

3. Attempt to negotiate directly with the prospect if they were introduced and avoid the agent. This choice could be troublesome. Some prospects would see this as unfair. They may ask themselves if he is unfair with the agent, will he be unfair to me? It may cause them to go elsewhere, or the agent may get a lawyer.

While this is an option, it is the least favorite. I would seek a legal opinion before choosing it.

How do we know the prospect wants it? Did you quote them a price? Did you check them out financially? Being excited and signing a lease can be miles apart in real estate transactions. Finding small commercial tenants is not normally this easy.

Most going businesses have a value. If you are simply closing your doors, is your business one in which your customers or inventory have no value? If so, it suggests the location may be valuable. What has been done to determine the rental rate?  This is a step in the real estate process that is vulnerable to error when the owner has been operating a business in a location for years. If you have not researched comparable properties and gauged the differences between them and your location, you may consider finding an independent opinion or two of the value of your building and competitive lease rates. When it comes to pricing and valuation research on neighboring properties, do not depend on hearsay or unsupported stories.

I hope this information is helpful, Barry. Good luck in finding a tenant and in your retirement.


Richard Montgomery







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