The Mistake of Doing Commercial Real Estate Without Representation
One of the most common hurdles we see is that buyers and tenants try to represent themselves in real estate transactions.
This may seem to be an efficient way to save time and money but most often the buyer spends more time and potentially costing themselves tens or hundreds of thousands in the process.
There are three things that need to be considered before attempting to enter into a commercial real estate transaction without representation.
The first thing to consider is time. The average commercial real estate transaction takes dozens of hours to complete. As a working professional you already have a full-time job which allows you two options for finding hours to complete this important transaction. The first is during working hours which you should spend creating revenue and the second is during personal time which would be better spent with family and taking care of your own needs.
The second thing to consider that is often a misconception in commercial real estate is that the buyer or tenant is responsible to pay their agents commission. Much like residential real estate the seller or landlord is actually responsible for paying all commissions. A savvy buyer might attempt to go directly to the seller or the agent to save three percent on their deal thinking they are saving on using representation. I assure you the landlord will take the deal without haste pay their agent the pre-negotiated commission and as a result you may be giving up ten to fifteen percent or even more on your transaction. At the end of the day it should cost you nothing to hire representation and in an attempt to save money you may actually be giving up common concessions that an experienced agent can help negotiate.
The final thing to consider is experience. Think about this for a second the average buyer or tenant may enter into four or five negotiations in their career yet a landlord who may transact on hundreds of deals in their career still hires professional representation. Unrepresented buyers or tenants receive far less favorable terms than their counterparts who seek professional advice.