Tom Miller, CCIM
Think You Don’t Need a Commercial Real Estate Agent? Think Again.
Let’s say after driving around the right areas for a few weeks, you zero in on the commercial building you want – it’s in the right location, it’s the right size, all the boxes are ticking off nicely. Before you pick up the phone to call the landlord – or his agent listed on the sign – and try to negotiate the deal yourself, here’s how to know if you’d be better off hiring a professional commercial real estate agent to help you out.
We’ll start with a basic list of questions you should ask yourself:
Do you know how much to offer or if your deal is as good as it could possibly be?
What do you know about the property ownership? What’s the local reputation of the landlord or owner? Is the portfolio being sold? What’s the financial condition? Who manages the property?
Is it a NNN or gross lease? Do you understand the differences and advantages of either?
What do you know about the property? Are there environmental concerns? Mold or radon issues? Is it in flood zone X or AE? Do you know the difference?
Is the site ADA compliant? Who pays for ADA upgrades?
Who are the neighboring tenants? What do they do? What byproducts do they generate? Are there noise concerns? Are they moving out? Who will move in?
Are there any pending capital improvements to the property? Do you understand that you may be financially responsible for these improvements based on the type of lease you sign? If the roof leaks, who pays to repair it? What about HVAC equipment, parking lot maintenance, etc.? Does the property have adequate retained reserves to make capital repairs as needed?
The list of questions like these goes on and on. Do any of them scare you? They probably should. But to a professional commercial real estate agent, addressing these questions (and many, many more) is just part of the job.
So how do you know if hiring an agent is a smart move? Simple. If you can’t easily answer these questions, save yourself the potential headache and cost of trying to DIY a commercial property deal. Hire an agent. Remember – almost always, the agent who represents your interests is absolutely free to you, since he gets paid a small share of what the landlord pays his own agent for his representation.
Read our blog post, “What’s the Best Way to Pick a Commercial Real Estate Agent in a New State,” for a rundown on how to find the right agent for your deal. Then be sure he or she can answer these three questions. And before you do anything, read our post, “The Hidden Trouble with the Landlord’s Real Estate Agent,” to understand that you must proceed with caution when it comes to the name on that real estate sign outside the building you’re considering.