This post originally appeared on tBL member Allen C. Buchanan's blog Location Advice and is republished with permission. Find out how to syndicate your content with theBrokerList.

Allen Buchanan

Allen Buchanan

Recently – in this space – I opined about commercial real estate technology and whether technology will replace the role of a commercial real estate broker.

If you missed the post, shame on you! But, here’s the punchline – Not likely, due to a myriad of reasons.

Today, I endeavor to discuss the function of a commercial real estate broker – in a deal – and to what extent that participation is necessary.

Before we address the question, a bit of background. Most commercial real estate transactions – be they a new lease, a purchase, or a lease renewal in an existing space  – employ two sides – a procuring agent – those representing the buyer or tenant and an owner’s agent – those representing the owner of the building. In California, agents are allowed to represent both ends of the transaction – also known as dual agency.

Each side has a purpose.

Tasked with finding a tenant or buyer is the owner’s agent. This effort is filled with all manner of marketing initiatives – to brokers and prospects. Sometimes an owner believes he can short-circuit the search for a buyer or tenant by planting a sign on the fornt yard and digitally advertising. Problems arise when the inquiries pour in, tours are required, and a negotiation ensues. OK, an agreement has been reached – now what? Certainly, a broker’s role on the seller’s side is crucial.

Conversely, a procuring agent’s goal is to locate a space for his client – the occupant. If a list of available buildings was easily accessed by a business looking for space – the contribution made by a procuring broker would be lightened – not eliminated but diminished. Residential agents face this challenge as all listed houses are public facing through sites such as Zillow, Realtor.com, and Redfin. A homebuyer can find out what is available with a swipe of an app. The only consumer-facing commercial real estate site is Loopnet. Accuracy of complete availability is limited as there is no governing realty board to create accountability for the submissions. So, a key to the walled garden of commercial real estate availabilities is secured through an agent.

I once heard the reason flight attendants are on board an aircraft during your cross-country flight – is in case of an emergency – not to serve you honey glazed peanuts. A similar set of crash precautions is contributed by the agents in a deal. Problems arise and a skilled practitioner can counsel you through various solutions. We recently guided a seller through a buyer’s request for repairs. What started as a high six-figure ask was whittled down to a mid-five-figure take – all because of our web of contractors. Don’t ever underestimate the power of a great network when it comes to solving a problem.

So, unfortunately, dear reader, a commercial real estate professional is a necessary evil in a transaction.

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