Buyer representation

Definition

A broker you engage and pay, whose duty on the deal is to you.

Why It Matters

Nearly everyone a buyer meets in this market is paid by the seller, so the ordinary state of affairs is that no one at the table works for you. Engaging someone who does changes what you get told: a firm on your side will argue the price down, name the risks a listing broker would leave for diligence to find, and say when to walk. The cost is real and it is yours. It does not come out of the seller's fee; it is added to it, so ask what the engagement covers and whether any part of it is contingent before you sign.

In numbers: A buy-side engagement might charge 2% of the price, so $80,000 on a $4M deal, and the buyer pays it on top of whatever the seller pays its own broker.