Often times I hear potential clients wondering what they should be looking for in a single tenant NNN broker?
To know what to look for you have to understand the commercial NNN STNL space and how transactions happen which not a lot of people talk about.
On the listing side with most major firms their structure is set up like this. If commission to the brokerage is $100,000 on the seller side of a transaction then about 50% ($50,000) goes to the main brokerage and the remaining $50,000 is split among the listing broker team members (usually 2 to 3 people). The senior broker in the business the longest gets maybe $25k out of the $50k and the remaining 1 to 2 agents get the rest of the $25k to split.
As you can see there is very little leftover for the brokers on each transaction on the listing side when they work for someone else. So the goal of most listing brokerage teams is volume where they have to sell, sell, sell to make any substantial money for themselves. Since I am the principal broker at NNN INVEST I get to keep all of the fee as it’s my company. This means the listing brokers have to do sometimes 4 to 10 transactions to my 1 to make the same money.
For a buyer working with a major firm usually means the listing brokerage does not have your best interests at heart. They represent the seller and want to sell whatever the seller wants them to. This could be a bad, mediocre, or good property. They try to talk whatever buyer inquires on their properties to sell why it’s a great deal, accentuate whatever positive attributes they can find and be silent on the negatives.
Often times to them it’s just another transaction or deal to close. This is not all listing brokerages and there are some that still do right by buyers but are few and far between so the odds of that scenario happening for you is small.
Where the listing broker is selling you whatever is in their inventory the buyer broker is not bound to that constraint because they do not represent the seller most times. Instead the buyer broker can look through their custom national database they have built over decades of time to get the buyers first looks at pre, on, and off market properties. Since the buyer broker in the business over decades of time is highly successful and wealthy they do not need to live on the transactions like the listing teams do. The buyer broker can look for the diamond properties to present to their exclusive clients and be open and honest about what they think of the properties and let the buyer decide what they want to do. This is a very important aspect of the transaction. The buyer broker worked hard to get where they are over decades of time so he understands how hard the buyer had to work for that money they now want to INVEST. The listing brokerages like working with NNN INVEST because we are known in the business and have a reputation for success. The listing brokers doing volume know the likelihood of the deal closing is high because the buyers have been properly vetted before NNN INVEST works with them and NNN INVEST will help guide them through the buying process. This helps the listing broker when they close deals to win more deals from their sellers. If the listing brokers work with unknown buyers and the deal falls apart it can make the listing brokerage get egg on their face and lose future business from the sellers. When listing brokers do not have much time they want to hand off to a buyer broker that knows what they are doing so it often helps my clients win deals when we go up against multiple offers.
We stay away from request for offers properties because with multiple rounds of bidding amongst buyers and financing changing before the winning bid is accepted, it’s often a bad deal for a buyer. We like to deal with the seller one on one and either take our deal or move on to another seller’s property.