Buying commercial real estate isn’t like buying a house. Many more details must be seen to, more regulations must be understood and the investor stands to lose a lot more money if the venture fails. A good Realtor and broker can be the difference between a smooth deal with a high possibility that profit will be made and a disaster that can take you years to clean up.
On the website of Commercial Real Estate Group of Tucson (Arizona), I found a fairly extensive list of commercial property buying tips, timing strategies, questions, hints, proposal info and some points about Americans with Disabilities Act compliance. Here are 9 of the many tips from that site.
1. Find an agent who understands the local commercial market and who works under a qualified commercial property broker. This duo will have deeper knowledge of the market and better and more accurate information about what’s happening in it.
2. Every time you meet with a “representative” of a piece of commercial property, find out if they’re a Realtor or if they’re an employee of the owner. This way you’ll be able to better protect your interests.
3. You’re better off with an agent who represents only you, not both you and the seller. The latter is called “dual agency,” and it must be disclosed before beginning a transaction, and it must be approved by all parties involved.
4. When choosing a broker, look for experience in his or her depth of knowledge as well as the volume of it. Successful agencies are successful because they do things right. A commercial real estate broker who knows the ropes, as they say, will benefit you in ways that are virtually uncountable.
5. Hire a broker who specializes in handling the kind of property you’re thinking of buying. Make sure you have an exclusive agreement with this person.
6. Put in writing your right to end the relationship with the broker in 10 days or less if you determine that he or she is failing to do the job that was promised. If there are complications in writing this up, you might want to consult a real estate attorney to get the information you need.
7. Make a plan of action. This will be not only a road map but also a document you can show to your broker as a list of requirements. Include in this plan the activities you can reasonably foresee needing to do such as meeting with various parties in the transaction, meeting with people who manage the building you’re looking at (assuming it’s occupied) and meeting with other professionals like attorneys and architects.
8. Closely go over with your broker all responses to offers and counter offers. Be sure you understand the numbers in estimates for repairs and other services. Be sure you spend time at the potential investment property and get to know it well.
9. Don’t fall in love with a property that’s in a location that could be counterproductive in generating profit. Not every commercial venture relies on location, but many do. If this is the case, determine to look ONLY in the right areas for the right properties, because the right properties don’t exist outside those areas.
There are many more things you need to know about buying commercial property, and your Realtor and broker will be glad to explain them. Bradford & Udouj Realtors, where Nick and I work, are consistently among the top-selling agencies in the Fort Smith area. The company gained its reputation because of honest dealings, market knowledge, excellent negotiation skills and absolute adherence to its clients’ best interests.
Call us. Let us show you a better way to buy commercial property.