What is flow of money?

What is flow of money?

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What is the flow of money?

A landlord will certainly engage a leasing agent to secure a rent deal; in return, the particular agent will be paid out a commission-based fee. This is known as the flow of money (or even flow of commission). The tenant, meanwhile, will be required to deal with the leasing agent in order to obtain the lease.

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

The question of whether a renting agent is ultimately behaving in the best interest with the leasee or landlord can be a complex and delicate one. Understandably, the nature of the lease or even engagement with the landlord will affect the character of the proceedings.

As an example, if a commercial tenant is seeking long-term surety for his or her business, they may engage in a lease phrase of 3, 5 or 10 years. For the leasing realtor, this means any possible income arising from the particular transaction will only occur at these relatively long intervals. This can 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, in case a leasing agent is which represents a landlord throughout multiple properties, you have the potential to gain multiple fees within the identical period. This elevated incentive could potentially affect the actions of the broker, who may act strategically in order to free up their earnings.

While most agents will provide neutral information in order to facilitate a fair deal for all events, the fact remains that the details an agent discloses to a potential leasee is up to their own discretion. This officially means that the renter or landlord could end up being disadvantaged if the pull regarding commission swings the particular favour in the other direction.

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

It’s also worth considering the role of broker commissions and company real estate services (CRES), which may work in the favor of either the landlord or the property occupier.

Brokers respond to behalf of the property owner. They are paid the commission when they are proved to be the “effective cause” of the hire transaction, e.grams. by providing an approved offer and a signed rent. The broker’s commission is added to the cost of the particular tenant’s lease rental and amortised over the cost of the particular lease - thus essentially, the tenant pays the commission.

CRES providers represent the particular interests of the occupier of the properties (the renter or the owner-occupier). Their expertise in commercial property may benefit customers by supporting them save money about rental and property expenses, and reducing risk through assisting with strategic property decisions. CRES providers are usually paid by the celebration whose interests these people represent and are not typically paid from the home funds.

How can impartial 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 may not receive the complete picture about a commercial property, together with certain pieces of information leftover undisclosed. This leaves the leasee at a distinct downside when making a decision on the commercial property.

By giving an online platform in which lets former as well as current tenants abandon unbiased reviews in regards to a property, we aim to close this space and bring much-needed transparency for the commercial property business.

Future tenants benefit from clear and open up information about the property, whilst property owners and administrators gain access to valuable property analytics and informative feedback about their room.

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