This is part of our ongoing series that debunks commercial real estate myths.
Myth #6: “I can easily find a tenant or buyer for my industrial property – there’s no reason to pay an industrial real estate agent’s fees to do it for me.”
We’ve discussed the importance of an agent from the buyer or lessee side previously, and here we’ll discuss the other side of the coin. This is the common scenario that perpetuates commercial real estate myth six. Your commercial or industrial property is vacant or about to be, and you’re worried about paying a fee to an agent just so he can put a sign up on your property. You can stick a sign out there just as well as he can, so that’s what you’ll do, keeping the fee the agent would charge for the same service in your own pocket.
When you put it like that, I agree with you. But any agent who places a sign on your fence and calls it a day is not doing his job, and you’d be right not to hire him. If, however, you were truly aware of the many services a professional real estate agency provides, your decision would be just as easy – but completely different.
1. The Sign
Yes, of course, there is the real estate sign, and while it’s the punch line above, there are two significant reasons that the sign really, really matters.
Certain agencies have immediate credibility with other agents and with the public at large. That credibility comes from establishing a proven track record of successful lease and sale transactions, and it means that any agent, tenant or buyer can expect total professionalism during the entire process. Teaming with an agency that has a long-term history of handling the same kind of transaction that you are about to begin also means a built-in level of comfort.
Let me also mention from personal experience that most agents avoid dealing directly with property owners. Property owners are not commercial real estate agents. They tend not to know the ‘rules of the road’ of commercial real estate, nor the typical way of doing this type of business. That lack of experience tends to add up to much longer deal time periods and many times a no sale for an agent. The simple truth is that agents tend to shy away from signs announcing For Sale or Lease by Owner.
2. Agency Services to Expect
The right professional agency will:
Complete initial analysis of the property, giving excellent advice on what needs to be done prior to presentation to the public.
Complete market analysis of vacancy rates, price trending and competing properties within the market.
Provide recommendations with asking prices and amenity data that helps place the asset in the market in an advantageous position for you.
Develop first class marketing materials that are at or above industry standard.
Place your property into all of the online commercial property databases, an expense
you may well not wish to take on yourself. For example, our agency spends well over $75,000 annually to place our clients’ marketing materials on web-based locations.
Distribute the marketing materials not only to local agents and potential users but also agents and users on a national basis. Some franchised firms can link with their other franchisees, but some boutique firms can link with all of them. Try to find that type of national coverage.
Back to the fee item again: Many professionals can either save you their fees by their experienced negotiations of the lease/sale terms or increase the amount you receive and thereby effectively pay their own fee.
The list goes on, but this gives you an idea of the services provide by a proper industrial real estate agency. Now, ask yourself whether you still feel that you can adequately sell or lease your property. What is the value of your time to successfully perform the transaction? Would your time be better spent doing something more productive? If not, and you’d like to learn more about hiring an agent, we welcome the chance to convince you. Call or contact us today.