EPS 322 - The Hidden Hands: Conflicts of Interest in Commercial Real Estate Deals
/In this eye-opening episode, we dive deep into a rarely discussed yet critical issue in commercial real estate: conflicts of interest when investment sales brokers push buyers toward in-house mortgage brokers. What may seem like a convenient “one-stop shop” can, in reality, disadvantage the buyer — sometimes significantly. Using a poker analogy, we paint a vivid picture: what if the seller and broker knew your hand? That’s essentially what happens when the sales and financing sides are too cozy — split loyalties, hidden fees, and lost leverage for buyers. This episode is a masterclass in buyer awareness. Paul Peebles doesn’t just point out the problems—he offers real-world strategies to protect yourself. His comparison to poker isn’t just clever, it’s chillingly accurate. In commercial real estate, where millions are at stake, understanding who’s really on your team can make or break a deal.
Conflicts of Interest Are Real
Many investment sales brokers recommend their own firm’s mortgage team. This can result in referral fees and biased advice that puts the buyer at a disadvantage.
Ask the Hard Questions
Transparency is key. Buyers should directly ask brokers:
• “Are you getting paid to refer me?”
• “Do you have any financial stake in this lender relationship?”
Use an Independent Team
Securing the best deal often requires working with independent mortgage brokers, attorneys, and advisors who have your interests—not the seller’s—at heart.
Think Long Term
Your relationship with your lender doesn’t end at closing. Choose partners who will support you throughout the life of the loan—not just get the deal done.
Know the Law (and the Loopholes)
While these referral practices are illegal in residential real estate under RESPA, there’s no such restriction in commercial deals. That makes buyer vigilance even more important.
One standout message: Don’t be afraid to stand your ground. Most brokers will respect your decision to bring your own financing team—if they don’t, that’s a red flag in itself.
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