A Dallas tenant representative is significantly different from a Dallas listing broker. Yesterday, I was speaking with a relative of mine in Houston. He was talking about his broker. He is looking for an office in Houston and having issues with the person that he thought was representing him.
He met this individual when he called off a listing sign. The broker was a listing broker and when it was determined that the space wouldn’t work he offered to take my brother-in-law to other locations. The one important omission was that this listing broker never asked the “client” to sign a representation agreement. In Texas, this makes the broker a sub-agent of the listing broker. He isn’t representing the tenant.
So the prospective client was calling the sub-agent broker his broker. He was functioning as if the broker was his broker but in fact the broker was a sub-agent to the listing broker. There is much confusion about the difference between a Dallas Tenant Representative and the Dallas listing broker.
Dallas Listing Agent
- Represents the landlord.
- Primary responsibility is to protect the landlord’s interests.
- Hired to get the most advantageous outcome for the landlord.
- Brings market knowledge to the landlord to help them make the best possible decision.
- Paid by the landlord.
Dallas Tenant Representative
- Represents the tenant.
- Primary responsibility is to protect the tenant’s interests.
- Hired to get the most advantageous outcome for the tenant.
- Brings market knowledge to the tenant to help them make the best possible decision.
- Earns commission from the landlord’s listing agent’s commission.
Both types of brokers are required to treat each party fairly and honestly. Each has a responsibility to their client to look out for their best outcome, in the transaction.
Often there is confusion about how a Dallas tenant representative is paid. Many people say that their is no cost the tenant. I say that there is a cost that is included in the transaction. However, the landlord has already taken this expense into account because they have already agreed to pay their broker. The majority of the tenant representative expense will come out of the listing broker’s fee.
Dallas office market rents already take into account the fact that the majority of leases have two brokers involved. If the building across the street just completed a lease with a $25.00 effective rental rate, the building you are interested in will require the same rate. Ultimately the reason the lease is done is to drive up the building’s value. By reducing the rent because to offset a commission can have a great impact on the overall value of the building.
So what I am saying is the sophisticated landlord will focus on increasing the office building’s value by requiring a high rental rate if you have a Dallas tenant representative or not. You will not see a reduction in rent by not hiring a Dallas tenant representative.