FIND APARTMENT

HOW CAN I FIND APARTMENT BUILDINGS TO BUY?

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A common practice among investors interested in purchasing apartment buildings is to engage the services of a broker/agent to do the initial searching.

A well prepared agent is personally familiar with the owners of apartment buildings and will contact them on your behalf regarding making offers to purchase, allowing you to make offers on properties that are not available to the unknowing buyers.

Access to the Multiple Listing Service can save you time and effort by finding and showing you the properties that best suit your needs before other buyers are aware they may be available.

If the broker specializes in the brokerage of apartment buildings and has a database of 4500 properties in Jefferson County, the job is easier.

Compensation for the broker/agent is usually provided from the sales price out of the seller's proceeds of the sale, but in rare cases the Buyer will pay part or all of the fee. This always raises the question of "WHO IS THE AGENT WORKING FOR?" Who is really paying the agent's commission and to whom does the agent owe fiduciary duties?

As a result, it is important for you to understand the fact that the term "buyer's agent" is usually a misnomer. In fact, and in law, the buyer's agent usually does not represent the buyer.

Even though you, the buyer, instructed an agent to locate apartment buildings for you, that agent is considered by law to be a subagent of the seller and is responsible for protecting and promoting the seller's interests. Kentucky Revised Statutes, now requires all agents disclose who they are representing, which has greatly clarified who represents whom.

Real estate agents, by their day-to-day activities, parallel the professional activities of attorneys. However, they should spell out in writing which party they are representing in each transaction.

It would be unheard of to have one attorney representing both the Plaintiff and the Defendant in a lawsuit. Most real estate transactions have as many adversary elements in their negotiations as we find in a typical legal litigation.

A "SINGLE AGENCY" format where the real estate agent/broker represents only one party to a transaction is the ONLY solution to fulfillment of the fiduciary obligations of a broker/agent, thereby assuring proper representation of the client, whether buyer, seller, or lessee.

An increasing number of educated and elightened brokers believe that you (as a buyer) may desire and need proper representation in real estate transactions and would rather employ a knowledgeable broker to solely represent you, not the seller. You become the Client, thereby authorizing the broker to fully represent you in negotiations with other agents or sellers. This SINGLE AGENCY concept lends itself very well to commercial/investment and the purchase of apartment buildings.

So the question is do your prefer to be a CLIENT or a Customer?

A. A CLIENT is a person for whom a broker is an agent, via a signed BUYER BROKER LISTING AGREEMENT, and from whom a broker receives a FEE for his services.

B. A CUSTOMER is a party to a real estate transaction, and is usually the purchaser, who receives services and benefits but pays no fee to the agent.

WHAT IS A BUYER'S BROKER?

A. A Buyer's Broker is an experienced/knowledgeable Realtor that lists the person, not the property, and represents their interests EXCLUSIVELY.

B. The most critical issue is who hires the agent, not necessarily who pays him. A Buyer's Broker and a Listing Broker are adversaries and should cooperate, but from and adversary position.

WHAT IS AN AGENT?

1. Webster says that an agent is "one who acts for or in the place of another by authority from HIM" i.e., the clone test where you are so is your principal.

2. Realtors Code of Ethics--Article #7 states "In accepting employment as an agent, the Realtor pledges himself to protect and promote the interests of the client. This obligation of absolute fidelity to the client's interests is primary, but is does not relieve the Realtor of the obligation to treat fairly all parties to the transaction."

HOW DOES CLIENT STATUS BENEFIT THE BUYER?

1. The Buyer receives more service from his committed Broker. He will take the time to do the market studies, market analysis, cash flow analysis, negotiating and structuring creative acquisition techniques. He can do this because as the client, you have provided all the facts about your situation and what you hope to achieve by acquiring this property.

2. There is more peace of mind because someone is looking out for YOUR INTERESTS.

3. You now have a larger marketplace in which to shop, because your Broker will be paid even if you the Buyer buy from a "For Sale By Owner" or even a "Not Yet for Sale Property" which the Broker will quite often present to you. Your Broker on your behalf will contact owners of apartment buildings that he knows meet your objectives, and ask them if they would be willing to look at an offer from a qualified buyer on their apartments.

4. It reduces the competition for the good apartments. You the Client are the only one that knows an apartment building is available, and through your Brokers efforts, the sellers are willing to consider offers to purchase.

5. As the buyer you don't have to worry about being talked into a purchase by the Broker, usually the reverse is true, the Broker will discuss the pros and cons of the investment, and you make the right decision. The Broker doesn't have to push for a sale, he knows that when you, his Client does buy, he will be paid.

6. The Seller knows in advance what amount he is paying in fees.

7. The Buyers investment needs are explained to only one agent, and therefore has to inspect fewer properties, and when he does, he is more thorough and conscientious.(The Buyer's Broker can also inspect the property on your behalf, write offers and submit them subject to your written approval if the situation dictates it.)

8. The Broker's services do not cost you more, yet you are receiving the professional service you are entitled to, instead of the Seller. (Any fees paid by you the Client to the Broker are simply netted out of the offering price, or if paid separately are deductible as a business expense.)

9. The Buyer gets the advantage of the Broker's knowledge, expertise and extensive database of apartment building owners, this saving him time, and you from making mistakes.

10. Your Broker will bring you more transactions through his daily, weekly, and monthly contact with apartment building owners and his networking with such organizations as Louisville Apartment Association, Kentucky Real Estate Exchangors, Kentucky Real Estate Investors Association, the CCIM National network, and extensive real estate websites that provide exposure and opportunity for purchase.

11. You will get first pick on all situations that fit your investment parameters. In the event you don't buy it, then the Broker will submit is to other Clients or Customers. But you look at it first.

12. Since you and the Broker know all the facts about what you are trying to achieve, he can be more creative in negotiations and the structuring of the transaction, And this is truly how "GOOD DEALS" are acquired. Now you know the REST OF THE STORY.

13. The Broker can negotiate from an adversary position against the Seller and his agent, thereby getting a better transaction for you, his Client.

14. The Broker should have the right to present the contract to the Seller, since you are his client, and in some cases are paying his fee, and he is not working as a sub-agent of the Seller.

15. This is the only way the Buyer truly gets legal representation in a transaction, that is with a written Buyer's Broker Agreement.

CLIENTS BUYER'S BROKERS WANT TO WORK WITH!

1. They are able to make a decision.
2. They are motivated to acquire property.
3. They respect their Brokers knowledge and experience and are willing to PAY for it.
4. They are loyal to their Broker.
5. They are financially qualified and can perform.
6. They are willing to PAY the Broker representing them a retainer and/or a fee to realize their investment goals.
7. They are realistic about the Marketplace and their own goals.
8. They are willing to sign and exclusive agreement and make a commitment to their broker.

How many properties have you looked at or made offers on in the past 12 months? Perhaps you should have someone representing your interests! Call for an appointment to see if we can work together, you might buy some apartments.

Joe Woodside, CCIM

www.ApartmentBrokersKY.com

Joe@ApartmentBrokersKY.com

Office: 502.459.7343

Fax: 502.459.7344

2210 Goldsmith Lane, Suite 129

Louisville, KY 40218