Understanding the Need for a Non Exclusive Buyer Representation Agreement

A non exclusive buyer representation agreement is an understanding made between a business and a commercial real estate broker to help locate, lease or purchase a property based on the criteria provided by the client. The agreement is non exclusive in the sense that the broker is free to help other clients to find similar businesses. However it is non negotiable for the client in the sense that the information contained within the document is provided as a matter of necessity and not as an invitation to negotiate. For example the most common type of non exclusive agreement is used to help a client find an office space. In this case the client will indicate what kind of industrial, office or retail space they want, the location, size, budget, parking, monthly rate, lease period, provision of furniture and other cabinets, etc. It would be a mistake to list or negotiate the items mentioned above in the actual contract. A better way would be to list the details in this way as a matter of circumscription so that the client will have a balance of options to weigh and choose from.

The importance of such an agreement is best appreciated once the client begins ordering the services of the broker. For example if a client is seeking to find a warehouse space then the client latest needs might require that the warehouse be located close to a major road junction or a location along a public bus route. However if the broker was told that the warehouse should lie along a secondary road only then there could be considerable confusion and frustration in finding out the right fit for the client.

Relevance in the renting of office space in Indonesia

In Indonesia where the process of renting or leasing an office space is accompanied by a lot of legal and regulatory procedures, the use of a buyer representation agreement becomes even more pertinent. The reason is that there is very little information readily available concerning the prices of rent and even if such information were available profiling accurately the market value of an office space is not an easy task especially when there are different levels of pricing for the same area. The benefit here is that the agreement offers an automated solution defining the different alternatives to choose from within the set parameters. In addition the broker will do the leg work for you by getting in touch with other real estate brokers to help you find the most suitable solution for you. This reduces the time and costs incurred to find your ideal office space.

The advantages from using a non exclusive buyer representation agreement

In a city like Jakarta there is no limit to the number and types of choices available in the real estate sector in the country. It is said that the city has an average of 1000 commercial towers in various sectors of the economy with an average of 25 towers being unveiled every year. Such an insight can only give an idea of the complexity and range of the choices available in the market. In addition space is limited in the city and the units are usually concentrated in a few areas.

In such a scenario it becomes obvious that the benefits deriving from having a non exclusive buyer representation agreement far outweigh the costs. Finding a good location for a business can sometimes depend on luck. It is the broker’s job to provide you with the necessary experience and knowledge that such luck can be generated in a predictable manner with efficiency. In addition the information provided as guided by the criteria outlined by the client will be more accurate as opposed to acquiring information from advertisements.

In conclusion there are many situations where a non exclusive agreement can be beneficial to a client. In Indonesia where there are many locations for renting or leasing an office space just to give an example, the process may entail selecting among dozens of equivalent options. Some of the factors to consider while making a selection could include the design of the building, the services provided, the price, proximity of the area to other facilities such as restaurants and cafes, malls, looping roads and other commercial buildings, the contractors of the building and other soft factors. The point is that without assistance these choices would be impossible to make and that is where the expertise of a broker is important.