Real estate registrations by brokers may be a thing of the past since we have been in an overstimulated real estate market. As we all know, this overheated market is now ending since the Federal Government is raising interest rates and the market is starting to slow down.
Real estate listing agreements usually do not exceed 6 months unless the property is under construction. The “form” listing agreement may provide a section regarding registrations of prospective buyers or tenants who have expressed an interest in the property during the listing term.
Listing agreements in commercial real estate are usually very specific regarding the time period in which the agent must provide written notice of the interested parties. The owner or Sublessor should accept the registration provided that the interested party or parties have met the following criteria:
Have submitted a written offer on the property during the listing term!
Registrations should not be accepted for prospects who have just toured the property and did not make an offer. In addition, the mere registration of the adjacent neighbors who knew the property was on the market but did not present an offer, should not be accepted.
It is allowable for the agent to submit a registration from an outside broker who made an offer during the listing term, but its offer was not accepted.
These registrations must have a specific expiration date, usually not longer than 90 days after the listing expired. Registrations should be considered a negative influence on subsequent agents who have listed the property. Subsequent agents find that they do not want to incur substantial time or money into their new listing when registration may come to fruition and the new agent loses his investment time into the property. It may be worthwhile to compensate the new agent for any expenses that they incur due to a registrant entering a contract with the owner/sublessor.
Lee S. Segal is a recognized commercial and industrial real estate industry leader in Los Angeles with over 40 years of working in the California commercial real estate business including expert witness testimony.
As President and CEO of Segal Commercial Properties, a full-service commercial real estate firm located in West Los Angeles, Lee has a high success rate working with exceptional people on a variety of projects including brokerage, investments, project management, development, property management, consulting, and more. Contact us today for more information.