FAQs - Cross Commercial Realty Advisors

Q: What is the difference between a "customer" and a "client"?

In real estate, another word for “customer” is “prospect”, and is the party owed the lowest legal standard of care. In practical terms, this means that everything the customer/prospect tells or shares with a listing agent can be shared with the property owner. It is the “client” that is owed the highest level of accountability and confidentiality, and is the party whose best interests are paramount and must be preserved and protected. Just as you would with an attorney, insist on a client relationship with your real estate advisor. Of note is that the client relationship must be established at the initial meeting or conversation and before any discussions occur.

Q: What is a fiduciary duty?

The term “fiduciary duty” refers to the legal responsibilities an agent or advisor has to his client. Listing agents have a fiduciary duty to protect the rights of the property owner and make every effort obtain the highest price possible. As a real estate advisor representing tenants and buyers exclusively, my fiduciary duty to my clients is to protect their rights and use my best efforts to obtain the lowest price and most favorable terms possible. Real estate agents presenting themselves to be tenant or buyer representatives, but who also list properties, are generally acting as “dual agents” and should be avoided.

Q: Define the concepts of “dual agent” and “dual agency” and explain why they should be avoided.

A "dual agent” is any real estate agent (or multiple agents from the same company) who represents both parties in the same transaction (think “double agent” for the true meaning). When this occurs a “dual agency” exists. Dual agency is the real estate industry’s dirty little secret and should never be tolerated by a commercial tenant or buyer. Here’s why: In practice, early in the process of looking for space to lease or property to purchase, tenants and buyers typically divulge confidential information to the real estate agent they perceive is representing their interests. This information can include how much they are willing to pay, when they need space, their target area, and other factors that, if known to potential property owners, would serve to dilute their negotiating leverage. Only when a lease or purchase contract is presented for them to sign do they discover the agent has also been representing the property owner. At that point it is generally too late to renegotiate the terms of the transaction, and the tenant or buyer may have run out of time to find alternate space. Because a dual agency always favors the property owner (and self-dealing real estate agent, who will collect the entire commission), real estate agents desiring to act as a dual agent must disclose his or her fiduciary status at the time of the initial meeting or conversation with each party and obtain written permission to the arrangement from each. If the agent fails to properly inform both parties of his/her fiduciary status in a timely manner an undisclosed dual agency exists, which is viewed as an unethical practice and, if reported, subjects the agent, or agents, to possible disciplinary action by the Department of Real Estate.

Q: Why should I use a tenant or buyer representative?

To insulate you from property owners and their agents and property managers, and protect your interests before, during and after the negotiations conclude. A true real estate advisors job is not over once the lease is signed - he should be at your side during the entire lease term to anticipate problems, answer questions and advise you on unfamiliar matters and changing market conditions.

Q: What is the CCIM designation?

The CCIM (Certified Commercial Investment Member) designation is the commercial real estate equivalent of being a CPA in accounting. This credential certifies that I have the practical experience and working knowledge to be considered an expert in commercial real estate. Fewer than 5% of all commercial Realtors have earned this designation. CCIMs have completed a designation curriculum that covers essential CCIM skill sets including ethics, interest-based negotiation, financial analysis, market analysis, user decision analysis, and investment analysis for commercial investment real estate. CCIMs have completed a portfolio demonstrating the depth of their commercial real estate experience. Finally, they have demonstrated their proficiency in the CCIM skill sets by successfully completing a comprehensive examination. Only then is a designation candidate awarded the coveted CCIM pin, joining the ranks of highly skilled commercial and investment real estate experts.

What is the difference between a “customer” and a “client”?

What is a fiduciary duty?

Define the concepts of “dual agent” and “dual agency” and explain why they should be avoided.

Why should I use a tenant or buyer representative?

What is the CCIM designation?

(480) 998-7998