Looking to purchase commercial real estate for your business or as an investment? The following are ten (10) reasons to strongly consider using a Commercial Real Estate Agent to represent your interests.
10. Provides a manager for the buying process.
A good Commercial Real Estate Agent will keep your property closing on track. For example – What is the status of the title commitment? Are there any questions or concerns with regard to the title commitment? Has the survey been ordered and completed? When is my feasibility period over? When does my earnest money go “hard”? Is the financing in place? Is an appraisal required and has it been completed? Have any necessary inspections been ordered and are they complete? Has an attorney reviewed the purchase contract? Have all of the closing documents been reviewed?
9. Referrals for experts who can assist with the property purchase.
Commercial Agents know other real estate professionals that can provide their expertise to the property purchase process. Professionals such as attorneys that specialize in real estate, title companies, surveyors, engineers, architects, CPA’s, insurance companies, building / property inspectors, environmental consultants, contractors, appraisers, etc.
8. Assist with due diligence.
As a part of the property purchase process, an experienced Agent can assist the Buyer in making sure that the appropriate items are researched to make sure that the property works for the Buyer’s needs. Due diligence is the pre purchase effort made to discover, and analyze information about the property under contract. Agents can assist the Buyer with obtaining the necessary documents and provide a checklist of these items including information regarding zoning, jurisdictional requirements, floodplain, easements, covenants, conditions and restrictions, utilities, etc.
7. Identify and assist with evaluating property conditions.
Commercial Agents can assist Buyers with identifying the most important items to be considered as a part of the purchase and evaluation process including a look at:
* Physical condition
* Allowable uses
* Limitations on interior / exterior additions or renovations
* Adequacy of access and parking
* Opportunity for expansion or leasing excess space
6. Experience from working with other Buyers
Based upon past experience, Agents can recommend other considerations to the Buyer such as – “Consider purchasing additional square footage which provides your business room to grow and until the space is needed the extra space can be leased and provide help with paying the monthly bills”.
5. Allows you to spend time with your business.
Let a Commercial Agent spend their time finding you property which allows you to spend time conducting your business. Focus on your expertise and let an Agent assist you by focusing on theirs. Time is too precious a commodity to be spent driving around looking for property.
4. Price and term negotiation expertise.
There is not another business professional with the experience and expertise that a Commercial Agent has to assist with purchase price and contract negotiations. Issues such as – What is a reasonable and fair price for the property? Is this a good buy? What terms and conditions should be in the contract to make sure that my interests are protected? Should I get some amount of inspection and feasibility time as a part of my contract for purchase so that I can better study the property and confirm that it meets my needs?
3. The cost to the Buyer is zero, zip, nada.
The Seller pays the Buyer’s Agent’s commission through a commission agreement between the two parties. The full cost is borne by the Seller.
2. Local Market Expertise
No one is going to know the local commercial real estate market as well as a Commercial Agent. The Listing Agent isn’t going to tell you if his/her property is listed above the market rate and only an experienced Agent can advise you with regard to the location making sense for your particular type of business.
1. Buyer’s needs differ from those of the Seller and they need representation to protect their own unique interests
The Seller or Owner will be represented by a Listing Broker and this Broker’s fiduciary responsibility is to the Seller. The Texas Real Estate Commission’s (TREC) “Information about Brokerage Services” states that “the Broker who lists the property for sale or lease is the Owner’s Agent”. It further states that, “a listing broker can assist the Buyers but does not represent the Buyer and must place the interests of the Owner first”. Finally it notes that “the Buyer should not tell the Owner’s Agent anything the Buyer would not want the Owner to know because an Owner’s Agent must disclose to the owner any material information known to the Agent. This is not a good situation for a Buyer to be in. Sellers have representation from their Listing Agents, Buyers need the same from a Commercial Buyer’s Agent.
by Mark Pustka