My company is looking at an opportunity to purchase a small multi-family package through a small-time local brokerage. We typically tend to deal with groups like CB, Cushman, JLL etc... so this group's form is new to us. This group has told us that they have been working with the seller for months to take this deal to market and are working towards a formal representation agreement. They are however willing to give us an early peak at the deal to preempt an offer.
The agreement states that the seller will pay the brokerage fee. The rub is that there's language in the agreement that requires the purchaser (us) to insert a contingency in our closing agreements that requires this as a condition of closing. Is this language typical in an off-market transaction? I understand that the brokers need to be paid but shouldn't that be between the seller and the broker? What do you guys typically see in agreements like this?
Putting fee arrangements into CAs is not typical but you do see it from time to time. I'd personally fight this pretty hard. However if the deal is reallllly juicy, maybe you could edit the language to allow your team to pay the fee in the event of a closing emergency situation.
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