How Not to Sumit an Offer
Over the years, I have run into potential tenants / owners who believe they know the best way to close a deal. Below is an overview of what NOT to do when you submit an offer.
- Do NOT try to negotiate terms when you are viewing the property. Unless you are great at face to face negotiations, the other agent / owner will start asking questions. Not all of the questions could be relevant to the negotiations. I have found most potential tenants will say something they regret. For example, I had a tenant admit he had numerous failed business ventures over the years. The owner’s agent took this back to the owner and the deal was dead. The fact the tenant had failed businesses in the past had nothing to do with this deal. The owner should have made his decision based upon rental history, proof of funds and credit ratings.
- Do NOT set response deadlines in your offer letter. In the commercial real estate world, this does not work. The other agent / owner will get to a prospective tenant’s offer when they feel like it. You have to stay cool and realize it could take 3-12 months to find the perfect location. This has killed many deals.
- Do NOT go around the agent that is representing you. In the Northern Virginia area, the number of active commercial agents is small compared to the number of residental agents. A potential tenants commercial agent more then likely knows the other agent they are dealing with. Most of the time, agents are pretty loyal to each other. If a tenant goes around their own agent, the owner’s agent will see this as a bad sign and will inform the owner of the disloyal nature of the potential tenant.
- Do NOT lie when it comes to tenant financies. If a tenant’s agent is going around and stating that they represent someone with great credit and this is not the case, it will hurt the deal. If a potential tenant has bad credit this is not a problem, they should notify their agent and let them know BEFORE they start to negotiate the deal.
- Do NOT hire a residental agent to do a commercial agents job. Commercial agents know more about the commercial market, zoning, special exceptions, etc. A residental agent might be great when it comes to residental properties, this does not mean they know anything about commercial properties.
The above items are ideas to help assist in your commercial property search.
Feel free to contact me if I can be of any help.