If you plan on buying a commercial real estate property, you are probably looking at a lot of different listings. Maybe, you have already talked to some owners and Seller’s Agents who have a “For Sale” sign in front of a property.
You can take the DIY approach if you have the time and the required knowledge to effectively close a deal. But, finding the right property may be more demanding than you think.
Buying a property is a huge step in life. But even if you are experienced, there may be landmines along the way that you might not see on time. This is why Buyer’s Agents exist.
The simplest job description of a real estate Buyer’s Agent is: to hear you out, go out there and get you a shortlist of properties, with a clean history, that match your list of requirements, and your budget. Easier said than done. By using a Buyer’s Agent, your next purchase should be less stressful.
Buyer’s Agents have great knowledge of the market and can assist you from the beginning of the buying process until the closure of the deal.
But not all Buyer’s Agents are made the same.
Let’s cover some key points to consider when choosing your Buyer’s Agent. This is a critical step. The right choice can lead you to the commercial property investment that works best for your budget and cashflow expectations.
Why Hire A Buyer’s Agent?
It may seem counterintuitive when speaking about property hunting to start with a conversation about Buyer’s Agents instead of properties. But there’s a very good reason. Several reasons, actually.
First of all, it costs NOTHING to hire a Buyer’s Agent. So, if the help comes for free, why not take it, right? Most people who are in the commercial real estate business already know this, but many times, we tend to forget the obvious. So, let’s just make sure it’s out in the open: Buyer’s Agents are paid by the seller of the property.
That proverbial 4 to 5% agent fee that the seller pays, gets split in half between the Seller’s Agent and the Buyer’s Agent. If you choose not to hire an agent, you’re not really saving yourself any money. You’re just making the Seller’s Agent a very happy camper that day. You get to do all the work, and the Seller’s Agent gets to keep all the money. Why would you do this to yourself?
If you decide to go about negotiating and purchasing the property yourself, you will have to handle a lot of paperwork. Or, you might be asked to accept a dual agency, when the Seller’s Agent represents both parties. This can quickly lead to a conflict of interest, and the odds will be stacked against you most of the times.
Your Buyer’s Agent should be there to help you quickly find your ideal property and to help in the purchase of the property. These agents can safely guide you through the entire process, and make the purchasing experience enjoyable.
During the property screening process, your Buyer’s Agent will be with you to give you insights about the properties and to offer feedback on any pros and cons of the locations. Moreover, the agent can tell you if there are some property issues while also pointing out features.
When you hone in on a particular property you’d like to buy, the agent can negotiate the offer and get you the optimal deal that fits your budget and cashflow expectations.
5 Key Responsibilities Of Solid Buyer’s Agents
Real estate transactions involve a lot of money, and doing the deal on your own is not an easy task at all.
When you are choosing a Buyer’s Agent, consider a few key points that they’d need to cover for you. If the agent you have in mind does not offer direct help with these points, you may want to look elsewhere for a reliable Buyer’s Agent:
- Budgeting and Borrowing: If you are just starting in the Real Estate business, one of the key values you can get from the Buyer’s Agent is to determine your buying and borrowing capacity. With basic information, such as financial savings, income, and current debt, the agent can help you determine your maximum budget for a property purchase.
- Property Assessment: The Buyer’s Agent should evaluate the property you select based on location, zoning, history of the property etc. They should also advise you on leasing and resale potential.
- Property Inspections: The Buyer’s Agent should help you with property inspections as well as other hidden costs you may not easily notice. This includes structural or cosmetic repairs, utility issues, permits, and so on.
- He/she can help you find the necessary professionals: You can have fixed any issues prior to purchasing, and the previous owner can pay for the repairs. The repair crew would answer/report to you.
- Exit strategy: Many times you’ll hear “Buy it, it’s cheap.” But, the proper way to go into a property is with a prepared exit strategy, where you make money in the leasing period, and when you sell it. Your Buyer’s Agent will need to advise you on when to sell, and at what price.
You will probably find many Buyer’s Agents who will want to distance themselves from as many responsibilities as possible. So we suggest that you find yourself an agent that will not shy away from the real work of helping you get a solid property deal.
Because some Buyer’s Agents have, in reality, a low interest in actually doing the required work, many Letters of Intent don’t materialize into a purchase. Sometimes, the Buyer’s Agent doesn’t bother to see if the buyer really can finance the offer. They even don’t bother to do a thorough property inspection, and the buyer steps back at the last moment. All these failed deals can be a result of picking the wrong Buyer’s Agent.
How Westwood Buyer’s Agents Stand Out From The Crowd?
There is value in experience, and experience cannot be rushed, learned in a book… or faked. With over 18 years of market experience, we have had the chance to work with hundreds of property buyers over the years. We have worked with clients ranging from single-tenant commercial property buyers to clients involved with multi-million dollar commercial buildings for banks, hospitals, etc.
Here are a few reasons Westwood can represent clients decently as a Buyer’s Agent:
- We are deal-makers. Seller’s Agents love working with Westwood because we make sure the deal goes through. Even if we offer a lower bid, we can still win the deal because we cover all the bases. We also make sure that the Letter of Intent carries real weight with sellers. Seller’s Agents know this, and once they see a Westwood Letter of Intent, our offer can fly to the top of the list.
- We know the property market inside and out. Valuations, depreciation, zoning issues, development plans for the future, hidden expenses… All these are key factors for making any deal a “win” or a “bust.” We can quickly see potential problems or potential growth opportunities that newcomers will not be able to notice.
- We help with financing. Westwood Buyer’s Agents help in setting up the financial construction for the deal, so you can get an excellent loan for your real estate purchase.
- We offer other professional advice. When making a purchasing decision, you may be facing various challenges, and you may need help navigating the legal maze. Some of our Buyer’s Agents are trained lawyers, and you get to have some advice for free as part of our service to you during the purchasing process but you always have to check with your own lawyer and CPA to make sure they bless your transactions.
Let’s Wrap Things Up
Buying commercial properties is not easy. There are tons of details to work through in every step along the way. Most of the time, this means you doing paperwork, reviewing the history of the property, screening each property, thinking of budget restrictions etc. The list goes on.
There is really no reason that you would want to do all this yourself, especially when you can get free help from a professional Buyer’s Agent.
But sometimes, some Buyer’s Agents will try to cut corners on their workload and distance themselves from key features such as property evaluation, financing advice, and exit strategies. This is why it is absolutely critical for you to make a smart choice and to pick a reliable, trustworthy, experienced Buyer’s Agent.
If you have any questions about getting a shortlist of properties, or if you need help with a review of a property you are considering, don’t hesitate to give us a call or reach us via the contact form.