This is the second in a series of questions to ask your B&B Broker. Getting good help as you buy, or sell, your B&B inn is just good business. It’s smart to let a professional help guide you through the maze of questions and issues that you’ll face in buying a bed and breakfast.
- Do you have a track record with Bed and Breakfast inn transactions?
Now it’s time to find out if the agent has participated in a completed sale of a bed and breakfast for sale. How many have they done, and which side of the transaction have they been on? In an ideal world they have handled both buyer and seller sides of the transaction so they can bring more experience and awareness to your transaction.How many of the transactions they were involved in failed? That’s not as negative a question as you might initially think. There are extenuating circumstances, beyond the agent’s control, that can cause a transaction to fail. Situations like the buyer or seller changing their mind; the buyer not selling their home within the contract deadline; the buyer not securing financing, or insurance even; the bank could renege on their promise of funds, too. Hearing about the agent’s experiences will give you insight into how they handle “speed bumps” you encounter along the way.
- Do you attend B&B conferences or have you had a class on how to operate a B&B?
To be a good B&B Broker your agent doesn’t need to have been a bed and breakfast innkeeper, but it sure helps to have studied about them. That’s the focus of some of these questions: how much research has been done about the business and way of life? A great way to do that is to attend one, or even more, classes or seminars on how to buy and operate a bed and breakfast. There are also lots of books available that can — should be — read by a serious B&B Broker.This question reminds you to probe to find out what they have done on their own to get educated. The agent doesn’t have to have read everything available on the subject, though that would be good, but if even one book has been read or one class taken, that’s an indication they are dedicated to being a good agent for you, and others down the road.
- What is your agency position? Buyer’s or Seller’s Agent, or Transaction Broker?
I come from a long history with Buyer Agency when it comes to working with buyers. Much of the country isn’t as familiar with or fond of Buyer Agency as I am coming from Colorado. But even within Colorado there are pockets of pro-agency and pockets of anti-agency real estate professionals.Your options include Buyer’s Agent, Seller’s Agent, Dual Agent, Transaction Broker, and Sub-Agent. A Buyer’s Agent works for you, the buyer; you are the person they have their fiduciary responsibility to. A Seller’s Agent works for the seller; their fiduciary responsibility lies with the seller. A Dual Agent is an agent who works for both the buyer and seller — with their written approval — and owes fiduciary responsibility to both parties. A Transaction Broker facilitates the real estate transaction; they don’t represent either the buyer or the seller and only work as guided by either or both party. A Sub-Agent is a real estate professional who represents the seller but doesn’t have a contractual relationship with the seller, and may not even know the seller.
It seems to me that you want someone in your corner who will work for and with you rather than just assist you in the transaction. When you find an agent you want to work with strive to go with Buyer Agency, unless it just won’t fly. It wouldn’t fly because they aren’t expert in Buyer Agency and thus aren’t comfortable doing that or because Buyer Agency is looked upon unfavorably in the area.
- Show me samples of all the contracts that could be used during the purchase process.
You should expect at the very least a Purchase Contract (the name changes slightly from state to state) — though some agents like a Letter of Intent instead. You could also get copies of an Agency Contract — the method of establishing your working relationship, a Promissory Note, and a Seller’s Property Disclosure. An ideal situation would be to also get copies of the various clauses, conditions, and contingencies your agent uses — or would use — in such a purchase as yours.
You are getting the idea now of how many questions you need to be asking. And the issues you are covering by exploring an agent’s background are becoming more clear too. You may spend a long time, and lots of time, with this person, so make sure you have a good relationship and communication before going very far down the path toward your B&B purchase.