Picking the right real estate broker is the first and perhaps the most important decision you’ll need to make when engaging in commercial real estate buying, real estate leasing, subleasing or lease renewal negotiation.
As a potential buyer of investment property, it’s imperative that you take advantage of the valuable services that a professional real estate professional can offer to a process that can easily become risky, time-consuming and expensive. As with any other huge business undertaking, failing to look for professional advice on an area that’s beyond your expertise can easily lead to poor decision making that will put your venture at risk.
However, it also requires that you pick the right professional for the job. That being said here are some key tips for choosing an excellent real estate broker.
Do Your Due Diligence
Begin by doing exactly what you would do when picking properties to potential brokers. This will increase the chances of picking the right broker. Ensure that you create a guideline that consists of your specific needs and goals to qualify the potential real estate broker.
An example would be a guide that states you will research all the candidates that you will potentially work with, read their promotional literature, brochures, past closings websites, etc. You can then cross-reference the history and credentials with other brokers in the market. Keep in mind that picking the right real estate broker could potentially bring you millions of dollars’ worth of time and money.
How Long Have They Been in Business?
There are numerous brokers who move from residential real estate to the commercial field, in an aim to make ‘big money’. However, they fail to realize that commercial real estate is more than just buying and selling real estate. It calls for the ability to comprehend and interpret rent rolls, profit and loss statements, third-party contracts and other specific documents involved with each transaction. If your potential candidate can’t figure out the net operating income or can’t tell what debt service coverage ratio of the property is, then you are better off looking for another broker.
Make an Effort to Know the Broker’s Staff
It is also imperative that you ascertain the competency of the broker’s staff to determine whether your deal will be handled with efficiency and professionalism.
An excellent broker will have ideal employees that have abundant knowledge regarding an area as well as the ability to make the transaction smooth. A few things to consider in this regard include: what type of connections do they have in the field? What do they know that will help you and your venture? Do they maintain relationships that can help you in developing market contacts?
Do They Have Experience in Your Particular Type of Product?
The importance of specialization ideally applies to the kind of property contemplated in the sale or lease transaction. There are substantial differences between retail, office and industrial properties. The physical aspects of each are quite different, and so are the term conditions, lease structures, operating expenses, and other things.
For instance, a single-tenant commercial triple net lease is entirely different from a full-service office lease. As such, you should make sure that the broker you pick has a track record of handling transactions in the type of commercial investment you wish to make.
Do They Have The Ideal Tools To Provide The Best Service?
We can’t stress enough that having proper information is a key element in making an excellent property investment decision. Knowledge is power, and so, your property broker should have access to the best analytical tools and market information to help them in doing the transaction on your behalf. So, ask for a list of these resources and keep an eye on their relevance to your needs.
Do They Keep Up With Changes in The Industry and Their Profession?
You should inquire about the potential broker’s credentials, education, and certification in regard to selling commercial property. Your broker may have years of experience under their belt, but they ideally have to be able to adapt to new buying and selling methods.
If they are unaware of the new investor trends in buying property or how new tech is affecting the industry, you risk losing out on a property. It’s imperative that you know who you are dealing with in regard to their familiarity with the kind of investment you want to make.
Ensure The Commercial Is Loyal To Your Requirements
A commercial broker or any other professional in this industry with a fiduciary interest in a property is not capable of putting your needs first. You should be very careful to deal with ambiguity upfront in any contractual relationship and should only deal with someone based on their loyalty to you and making you their first priority. You should particularly pay close attention to how fast they respond to calls, texts or emails after the meeting.
This might seem insignificant, but it certainly says something about their professionalism and the manner in which they conduct business. First, a commercial real estate broker will have information regarding the market that you won’t, particularly if they have worked in the field for a significant period. A broker that has sold the exact commercial properties will be able to give you history regarding ownership and building conditions that you would not be able to get from other sources.
You should interview these professionals at Live Love at Home Philadelphia real estate to ensure that they are an excellent fit for conducting business. The ideal broker will look for properties that meet your business and investment criteria. In the long haul, this is a business relationship that grows with time, and so, you should make an effort to nurture this relationship. Clarity regarding your investment needs will help minimize problems in finding an ideal broker. A few resources that can help you start the process would be recommendations from fellow investors, investment associations, professional periodicals offline and online, as well as word of mouth from trusted colleagues.