Real estate professionals provide clients with indispensable knowledge, tools and techniques that allow them to make a more informed decision when looking to buy, sell or lease a property, says Simon Caplan, SIOR, a partner at Cushman & Wakefield/CRESCO Real Estate.
“The access to market information, the negotiating skills and the ability to manage the various components of the transaction provide the client with tremendous value that is worth its weight in gold,” Caplan says.
Brokers have access to information that allows you to look beyond the basics. Their market knowledge and experience can help you make the right move, Caplan says.
Smart Business spoke with Caplan about the benefits of using a real estate broker.
Why should you hire a real estate broker when buying, selling or leasing a property?
A good broker should always suggest to a seller or landlord multiple ways to improve their property value by making it more enticing to prospective buyers or tenants. You only get one chance to make a first impression. Good or bad, that first impression can greatly influence a prospective buyer’s valuation of your property. These improvements should be done on a priority basis to minimally make the client’s property equivalent to similar available properties. This might include things such as cleaning, painting, fixing lighting, replacing damaged or stained ceiling tiles or repairing obvious building code violations. The increase in value achieved through these improvements typically is much greater than the cost of doing the work. If your property looks like it has not been cared for or has been poorly maintained, most offers to purchase or lease will be below expectations. Your property needs to look sexy and appealing so that prospects want to come back for a second date. A broker should be able to show interested parties why your property is worth the asking price by talking about its amenities, as well as comparing it to recent deals in the same part of town.
When participating in today’s volatile, overpriced market, you need to have a knowledgeable real estate expert on your team.
What should you know before going to market?
A good broker will want to understand multiple things about you and your company. What are your space requirements? Why are you looking to move? What benefits are you looking to achieve in your new space? What amenities do you require and what constraints are you placing on the search? Expect to answer a lot of questions from your broker and, depending on your requirements, have multiple people in your organization ready to share their perspective on the project to provide your broker with a good understanding of what you want to accomplish.
Once everything is clear, your broker will be ready to start showing you properties. A good broker should be a consultant to you, explaining the good, the bad and the ugly about the properties you tour and in a short time, be able to provide values to the properties that have piqued your interest. In today’s market, quality industrial buildings are in short supply, overpriced with many times multiple offers, and are often difficult to find. However, there is a fair amount of office space available throughout the market.
Once the property is selected, initial offers are usually made through a broker’s nonbinding letters of intent to negotiate the major business terms of the transaction. Once you have a basic agreement between the buyer and seller or tenant and landlord, a purchase agreement should be prepared and negotiated, including all business and legal terms.
What are some key points with regard to your due diligence process?
There are several areas that should be addressed during this process. Look for potential governmental concerns such as zoning, lot coverage, fire code compliance and economic incentives, as well as possible title issues like liens or easements. It’s also important to do a physical review of the property to examine for structural, mechanical or roofing concerns, as well as possible environmental issues. Addressing problems before you finalize the transaction can help you avoid a lot of headaches.
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