What to Ask a Broker Before You Sign Anything

Commercial real estate brokers guide most transactions and influence significant financial decisions. The right broker provides expertise that produces better outcomes for the client. The wrong broker costs money and time. For Macomb County buyers, sellers, tenants, and landlords, the questions asked before signing a representation agreement determine whether the working relationship will produce good results or unpleasant surprises.

Questions about experience. How many years working specifically in Michigan commercial real estate. How many transactions closed in the past 12 months in the specific property type of interest. How many transactions closed in the specific submarket. What size range those transactions covered. Whether the broker specializes in buyer, seller, tenant, or landlord representation. Generic residential agents attempting occasional commercial transactions typically underperform commercial specialists.

Questions about representation. Whether the broker will represent the client exclusively or represent both sides as dual agent. Dual agency creates inherent conflicts and should be avoided when possible. Whether the broker has current listings that might create conflicts. How conflicts get disclosed and managed. Fiduciary duty obligations under Michigan real estate law and how the broker will fulfill them.

Questions about the commission structure. Commission percentage. Who pays the commission. Any additional fees beyond commission. Whether commission depends on closing or is earned at contract execution. Refund rights if the transaction fails. Reduced commissions in specific scenarios like buyer bringing their own property or seller finding their own buyer.

Questions about market knowledge. Current cap rate ranges by property type across Michigan submarkets. Recent comparable transactions the broker has direct knowledge of. Current lease rent ranges by property type and submarket. Local lending market and which lenders actively fund the specific property type. Michigan specific considerations including property tax uncapping and attorney close process.

Questions about process. Typical timeline from engagement through closing. Key milestones and deliverables. Communication expectations and frequency. What the broker will produce and what the client is expected to produce. Documentation and reporting quality. How specific the broker’s marketing plan will be on listing engagements.

Questions about references. References from clients with similar property types. References from clients with similar transaction sizes. References from clients within the past 12 months rather than distant history. Public records showing brokerage activity. Any regulatory or professional history the client should know about.

Questions about the specific transaction. What the broker’s initial assessment of the property or opportunity is. Pricing recommendation and supporting analysis for listings. Buyer requirements assessment for buyer representations. Any specific challenges the broker sees. Timeline expectations. Value the broker expects to add beyond what the client could achieve unrepresented.

Questions about resources. Marketing platforms and reach. Network of buyers or tenants. Access to market data services like CoStar or LoopNet. Support infrastructure including analysts, administrative staff, and legal support. Digital marketing capabilities. Physical marketing capabilities if relevant to the property type.

Red flags to watch for. Pressure to sign representation immediately. Reluctance to provide specific references. Vague answers about market data or comparable transactions. Absence of specific written marketing plans for listings. Suggestions of dual agency without clear conflict management. Commission structures that reward volume over client outcomes. Any pattern of prioritizing broker interests over client interests.

The buyer representation question specifically. Buyers benefit significantly from broker representation because a buyer broker searches the entire market on the buyer’s behalf, negotiates for the buyer, and advocates for the buyer through due diligence. Buyers using the seller’s listing broker as dual agent lose advocacy. Commission on buyer representations is typically paid by the seller through the listing agreement, so buyers rarely pay their broker directly.

The seller representation question specifically. Sellers benefit from broker representation through market exposure, negotiation support, and closing coordination. Full service listing brokers provide significant value across the full transaction. Discount or limited service brokers reduce cost but also reduce service. The right choice depends on seller sophistication, market conditions, and property characteristics.

TDG Commercial, known as top commercial realtors in Macomb County, welcomes the interview process on both buyer and seller engagements across the region.