What is the pro / cons of hiring a broker or doimg for sale by owner with commercial real estate?

In Selling Property - Asked by Paulette S. - Aug 4, 2015
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Answer(s)

Coulombe R.
Broker/Agent
Berlin, NH

The obvious pro to hiring a broker/agent for selling your property, commercial or otherwise, is that you have the benefit of their professional experience and licensure to fall back on in the offhand chance that something goes awry with the purchase, now or in the furture. That professional will there to stand behind you even a couple years down the road, which can happen even with the smoothest sales. The only con I can think of, is that you will pay a certain fee for services, but the immediate cost to you far outweighs the potential of facing an issue without that professional behind you. Aside from that, real estate can be a very emotional prospect for the Buyer/Seller. Let the pro remove that factor and get you down to what will and will not work. They are there to offer their vast knowledge, use it, but be willing to pay them for it.

Aug 4, 2015
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Randolph G.
Broker/Agent
Boca Raton, FL

For a small "mom and pop" type property, doing it yourself may be the way to go. But the larger and pricier the commercial property, the more important it is to hire someone you trust. Often, commercial brokers have a greater reach to find a buyer (using a service like Loopnet!), they should know the market, be available for showings, proposals, analysis, objective recommendation, and a good broker's company brand on that "for sale" sign even adds credibility to your efforts. If your main objection is paying a commission, then by all means negotiate a fair commission up front..

Aug 6, 2015
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Chris R.
Broker/Agent
Denton, TX

Pros - so many.... most owners of properties are not skilled in doing all the things that us commercial REALTORS do to market a property and get it sold. From gathering all the needed information to properly market the property and present a true picture of the offering to getting it listed on commercial websites that most owners are not going to be aware of / members of, etc.. Then responding to calls and inquiries, showings, negotiating the deal, negotiating the contract, inspections, appraisals, request for info, title company issues and on and on to get to the closing table.
Con - saves the commission - if the owner can do all that is needed and required.

Aug 6, 2015
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Candice A D.
Broker/Agent
Fort Mohave, AZ

I am a broker, and when I sell an investment property, I hire and pay another broker, without haggling their fee. The reason is: selling your own property is very involved. You'll need to be present (usually at an inconvenient time), make full disclosures, provide research on the property to prospectives and negotiate a deal, then preside over the transaction through due diligence and closing. You'll be dealing with attorneys, appraisers, lenders and inspectors. It's much easier to have someone else handle those details for you, and absorb some of the liability. I'm not even sure you'll be ahead the fee. We talk to prospects all the time who believe the listing agent will 'give them the best deal' when the opposite is true - they are working in the seller's best interest. If you are a FSBO, be prepared for people to approach you and expect a deal because you don't have an agent.

Aug 7, 2015
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Chuck W.
Broker/Agent
Cheyenne, WY

While all state real estate licenses grant brokers the right to sell any type of real estate the same can be said of lawyers practicing any type of law or doctors practicing any type of medicine. Would you go to a general practitioner just out of med school if you needed brain surgery? Probably not. Likewise commercial real estate requires an understanding of complex financial matters and how they apply such as net present value analysis, not only how to calculate a cap rate but what its limitations are. Tax laws, negotiating skills, experience in given commercial market type eg. apartments vs. retail all come into play. Financing and lease combinations from land contracts, all inclusive trust deeds, lease options, triple net leases, non recourse loans among other items are all essential instruments of which a broker must have knowledge of in order to advise his clients. Commercial Brokers who have the CCIM designation are specially trained to assist in this area.

Aug 10, 2015
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Ed B.
Broker/Agent
Fernandina Beach, FL

Commercial properties come in all shapes and sizes. An experienced broker will think of uses and buyers you might not normally consider. He or she will add value for both parties and will be invaluable in the marketing effort and in finding a buyer. You're really paying for a variety of experiences and local knowledge as well as marketing by a professional.
"By Owner" in commercial property is sometimes quite difficult. The average owner will not know how to price, clauses to add in a contract, understand the best potential uses for the property and will often price above or below the market....both undesirable. They won't know potential sources of financing, permitting hurdles, zoning issues, engineering, environmental, structural, site, title........

Aug 11, 2015
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