What is flow of money?

Do you know the flow of money?

A landlord will engage a rental agent to secure a lease deal; in return, the particular agent will be paid out a commission-based fee. This is called the flow of money (or flow of commission). The actual tenant, meanwhile, will probably be required to deal with the particular leasing agent so that you can obtain the lease.

Does the flow of money favour the landlord or the leasee?

The question of whether a rental agent is ultimately performing in the best interest from the leasee or landlord is a complex and hypersensitive one. Understandably, the type of the lease or even engagement with the landlord will affect the character of the proceedings.

For instance, if a commercial actuel is seeking long-term surety for his or her business, they may engage in a lease term of 3, 5 or 10 years. For the leasing broker, this means any potential income arising from the actual transaction will only take place at these relatively long intervals. This will impact any help the agent stands to get from the transaction, particularly if this is the only home they are representing with this landlord.

On the other hand, if a leasing agent is representing a landlord around multiple properties, there is a potential to gain several fees within the same period. This improved incentive could potentially impact the actions of the realtor, who may behave strategically in order to maximise their earnings.

While many agents will provide unbiased information in order to help a fair deal for all parties, the fact remains that the info an agent discloses with a potential leasee is up to their discretion. This officially means that the actuel or landlord could end up being disadvantaged if the pull associated with commission swings the particular favour in the other.

Brokers vs CRES - who do they favour and who pays?

It’s additionally worth considering the role associated with broker commissions and corporate real estate services (CRES), which could work in the favour of either the landlord or the property occupier.

Brokers act on behalf of the landlord. They are paid a commission when they are been shown to be the “effective cause” of the hire transaction, e.grams. by providing an approved offer and a signed hire. The broker’s commission will be added to the cost of the tenant’s lease rental and amortised over the cost of the actual lease - so essentially, the actuel pays the fee.

CRES providers represent the particular interests of the occupier with the properties (the tenant or the owner-occupier). Their knowledge of commercial property can benefit customers by assisting them save money about rental and property expenses, and minimising risk through helping with strategic house decisions. CRES providers are typically paid by the celebration whose interests these people represent and are not typically paid from the house funds.

How can unbiased Property Reviewed help level out the playing field?

As discussed above, the current flow of money system creates a ‘loophole’ which means, in some cases, a potential tenant might not receive the complete picture about a commercial property, with certain pieces of information remaining undisclosed. This leaves the particular leasee at a distinct downside when making a decision on the commercial property.

By providing an online platform in which lets former as well as current tenants leave unbiased reviews about a property, we try to close this distance and bring much-needed transparency towards the commercial property industry.

Future tenants reap the benefits of clear and open information about the property, whilst property owners and administrators gain access to valuable property analytics and useful feedback about their area.

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