Las Vegas Homes, Condos, Land and Commercial Real Estate Blog

I am going to break an important business rule and promote a competitor of mine. Why? Credit has to be given when it’s earned and Colin has earned my respect.A good way to gain added value in a real estate transaction in Las Vegas is to buy a property and then up-zone it. For example; buying a residential property and then changing the zoning to office commercial.  Millions have been made by savvy investors who bought industrial properties or Las Vegas land and changed the zoning to commercial tourist or MUD1.I have a property on Desert Inn and Oneida Way, for those who are unfamiliar with Las Vegas it is located about seven minutes to the east of  Wynn Las Vegas on Las Vegas Boulevard. The zoning for this property was residential and master plan was office. Although this is called conforming zone change, one has to satisfy numerous Clark County requirements in order to change the zoning and obtain a certificate of occupancy.  I am a few weeks away from finishing this project and decided to not list it formally until I am done, but I put a for sale sign on the property in the mean time. I get many calls for the property from civilian (non-agents) and a few from agents. Last week I received two calls which prompted this blog. One of the calls was from a lady realtor whom will remain un-named. Before asking for any info regarding the property her first question was what will be her commission. This is due to the fact that her criteria were her commission and her customer’s interest came a distant second. I told her that I would give her 2.5% and she promptly answered that the commission would be insufficient for her and that I have to offer a much bigger commission. Home and condo builders are offering commissions as high as 10% but the same is not true in commercial deals and 2%-3% is the norm. I explained to her that her way is foolish and although she is not breaking any laws, I consider her action immoral. I told her that putting the customer’s interest before hers will gain her repeat customers and referrals which more than make up for 1%-2% difference for a onetime commission. She hanged up on me.The next call was from a commercial agent named Colin Trap. Although the property is for sale by owner for the time being, all he asked in our telephone conversation was relevant questions about the property, and asked for a flyer which I e-mailed him. Next day he called for an appointment to show the property and it was me who brought up the commission, he agreed without argument. I met him at the property and found him to be true gentleman. I don’t know if he will charge the buyer for a commission or not. But if does or doesn’t, either way he acted in the best interest of his customer and that gains my respect.Las Vegas Residential real is a different from commercial real estate and Realtors who have not been educated in commercial real estate don’t have the necessary tools to optimally represent their customers. Doing commercial real estate in Las Vegas requires a good knowledge of different zonings (present zoning, master plan zoning and overly zonings), some knowledge of title 30 and tile 29 which govern Clark County and Las Vegas real state and much more. A Realtor who possesses little knowledge of commercial real estate and cares more about a percent or two in commission than his/her client interest should be avoided.There is a definite conflict between the fiduciary duties to a client and showing properties to a client based on commissions paid to the selling agent. Las Vegas MLS and commercial database both have a search option based on commission, that is if you search for properties and use 3% commission among other criteria, the results will not show any properties whose owner is offering less than 3%, regardless of the fact that one of the eliminated properties would exactly fit the client’s requirements. Until this conflict is resolved, property buyers could increase their chance of getting the best deal by signing a buyer’s contract with the agent of their choice. For example the buyer signs a contract with the agent to pay him/her 3%, The agent in turn should deduct whatever commission he/she gets from the seller from commission charged to the buyer. If the seller pays a 3% commission then the buyer will pay no commission to the agent. Sometimes the buyer has to pay 1%-2% to their agent, but the savings can far surpass this amount.I personally never take my commission into consideration in picking properties for my customers and neither does Colin Trap; you need to ask your agent if commission is a consideration in showing you properties.