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5-Reasons to Use a Buy Broker: A Critical Piece of the Puzzle

July 6, 2017

 

Often the question is asked, “why do I need a buy broker” when purchasing commercial real estate.  If price alone was the only factor that needs to be addressed or negotiated, then one may not need a buy broker to act on their behalf.  However, the truth is that price is only one of many things that need to be addressed and negotiated and therefore, one should always engage a buy broker when looking to make an acquisition.  Below are just 5 of the many reasons that engaging a buyer’s broker is so important and beneficial.

 

  1. Cost Savings Through Price Negotiations – It is evident that the sellers broker/agent is working to get their client the best possible price (highest price for their asset), the buyers broker will work to get the best possible price for the buyer.  It is often misunderstood that the buyer in a transaction is not saving money by not engaging a buyers broker.  In fact, the buyers broker is compensated by the sell side in most transactions in commercial real estate.  If one elects not to hire a buyers broker, the commission that was allocated to for this broker will actually be given to the sellers representative.

  2. Ensuring a Proper Fit – Through their extensive market knowledge, a buyers broker will work to ensure that the properties that you are looking to acquire are in fact a good fit for your investment mandate.

  3. Negotiations –A buyers agent continues to keep their buyers best interest in mind.  Negotiating transaction in every business is very specific to each individual business.  Ones ability to negotiate is sharpened over the years.  A commercial real estate broker utilizes their experience in maneuvering through the negotiation process relieving their clients of the stresses of a transaction by acting as a buffer, and freeing up their client’s time so that the client can focus on their daily business.

  4. Deal Structuring – Although the real estate transactions are similar in many facets, they are each very unique in their respective structures and functions.  Proper structuring of a deal can help to save the buyer money.   

  5. Time Management – Often commercial real estate investors have a different line of business as their day jobs.  The use of an experienced buyers agent allows investors the ability to continue to run their day-to-day business while their agent maneuvers through the transaction on the buyers behalf.

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Lcasano@raemcapital.com

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