Why Should You Use An Industrial Property Broker?
You have access to the internet, you know how to find properties on the various property portals, you can get landlord contact details, why should you use an industrial property broker?
First let’s look at what an industrial broker actually is and what they do
Their key focus
Although also governed by the EAAB (Estate Agents Affairs Board) an industrial property brokers focus is very different from a residential agents focus. As opposed to residential agents, industrial brokers focus on properties that cater specifically for industrial applications. These properties are generally either factories or warehouses.
What qualifications do they need?
Their qualifications can vary but at the very least brokers need to meet the educational requirements of the EAAB in order to operate, but they also need to have a sound knowledge of industrial properties, their markets, and the areas that they operate in. It is highly advantageous to have a business degree as this will help them understand basic business principles and be able to relate better to their clients and their needs.
Fidelity Fund Certificate
All agents operating in the property market, whether residential, commercial, industrial or other, have to hold a valid fidelity fund certificate issued by the EAAB which is renewed each year. This certificate also specifies the agent’s credentials and designation. Holding a fidelity fund certificate means that the client is protected by means of the fidelity fund against unscrupulous or unethical behaviour. Each agency also has to have a trust account to deposit funds that need to be held in trust. These accounts are audited each year and the monies need to be accounted for.
Are they all the experts?
Not necessarily. There is a big difference in an intern agent who has the minimum qualifications to operate under supervision, and a principal agent who has qualified and meets or exceeds the educational requirements, has written the PDE 5 board exam, and is qualified to operate their own agency independently.
Types of services they offer
Industrial brokers specialise in sales and leasing of industrial properties. Sales would involve a buyer for a specific property and leasing involves securing a tenant for a property. Brokers also market land as well as developments, both on a turnkey or tenant driven basis, for tenants and owner occupiers. More experienced brokers also offer consulting services.
How are they paid?
Brokers generally earn their living from commission payments resulting from successful deals. Most of their work and efforts is on risk. More qualified brokers can also market their services in the way of consultants and charge consulting fees to clients for their experience and input in certain circumstances such as negotiating lease renewals or consolidating various properties into one site. A broker must hold a valid fidelity fund certificate in order to be eligible for commission.
Code of conduct
Part of being a legitimate agent or broker means being bound to a code of conduct as set out by the Estate Agents Affairs Board. This code is there to protect the consumer as well as regulate the industry and protect the various players within the industry from unscrupulous or unethical conduct.
Why you should use a broker:
- A good industrial property broker will assess your business’s needs and be able to source the right property for you
- A good broker understands the fundamentals of property design as well as technical details like zoning, FAR, coverage etc.
- They are often, and should be, area specialists. They know which properties within specific areas may work for you, they know the history of the properties in the area, and most importantly which properties are available, or are becoming available.
- They also know the right pricing for a particular area and what the market will pay for property in that area, and they have already established relationships with landlords in the area which enables them to negotiate properly on your behalf
- As mentioned previously, brokers work predominantly on risk unless otherwise negotiated upfront so it’s in their best interest to secure the best possible deal for you and the landlord
- You won’t conclude a deal at a better rate just because you bypass a broker. Their fees are already budgeted for in the landlord’s marketing costs. In fact there is a greater likelihood that the broker can actually negotiate a better deal for you and save you money.
Play fair – things to consider when you do use a broker
- You only need to use one broker. Unlike with residential properties almost all properties are on an open mandate which means all brokers have access to the same stock. If you use the right broker they will find the best site without your having to deal with a handful of agents at the same time. Stop trying to find the right property, and just appoint the right broker!
- If you are introduced to a property and view the property with a particular broker then you are obliged to use that same broker if you decide to negotiate on the property. Likewise if a broker knows that you have already been introduced to a property they may not introduce it to you as well as it goes against the code of conduct and puts the property owner at risk of having to pay double commission. If you have a preferred broker that you want to deal with then appoint them from the outset of the process.
How we can help
If you’re in the market for an industrial property, are looking to lease, sell, buy, rent out, or just need some advice then don’t hesitate to contact us. We are qualified Master Practitioners in Real Estate, hold valid Fidelity Fund Certificates, and have over 18 years experience in the industrial market.