In commercial real estate sales today it is likely that you will have fewer offers when it comes to each single listing. This then says that you need to do more with less to get a transaction across the line. Local market knowledge and property information will help you.
A special note should be made that any quality listing in a top location will create significant interest from potential purchasers. That being said, every offer needs to be checked out prior to submission to the client. A top property will also create the potential of multiple offers. If that is to be the case, then you should choose a method of sale that allows the clients price and contract situation to be optimized.
The presentation of an offer to a client is a critical and important process. All the facts of the offer need to be checked and prepared for the client’s consideration and acceptance. As the broker working for the client, your professional negotiation process will help you in achieving a satisfactory outcome.
Here are some tips to help you with the offer and negotiation process. You can add to this list based on your location, and the property type.
- From the original listing process, you should understand the property in a comprehensive way. Any issues or hurdles should have been identified so that you can handle them as part of the negotiation. The weaknesses within the property may be a discounting factor, so preparation is the key to removing the weaknesses from the negotiation.
- Understand the details relating to legal title to the property. As part of that, check off any issues that relate to due diligence and property usage. Most sales transactions are taken to a level of due diligence prior to settlement. You don’t want the sale to derail because of an unexpected factor of property ownership or occupancy.
- Understand the client’s requirements when it comes to a satisfactory sale outcome. They will have issues relating to timing, price, and finance. The sales transaction and the offer will need to be structured accordingly.
- Qualify the prospect before you go to the final stages of offer. Understand their finance capability, identity, and their ability to act. Be careful when it comes to the legality of the parties involved. If the property is to be purchased in a company name, check out the facts and the complexities of the process. Protect your client’s position through the documentary process.
- It is likely that there will be some conditional clauses and provisions within the contract. They should be checked for accuracy, description, and legality. Ensure that your special terms and conditions are legally correct for the property type and the market today.
- Any offer should be supported by legally correct documentation signed by the potential purchasers. At the same time as the documentation being provided, get some clarity regards payment of deposit monies and valuable consideration.
- Check out any price offers relative to and against the prevailing market conditions. Your client’s investments and sales results should be in parity with the property market.
So there are some important things to do here as part of protection your client’s position in any sale situation. Preparation and local market knowledge will always help you construct the best available offer for the property and the prevailing market conditions. In that way you represent the client correctly at a fiduciary level.