The right commercial real estate broker can make a portfolio-enhancing deal look simple, even when anyone with even modest CRE investment experience would know otherwise. That’s why choosing the right broker for your commercial transactions is a crucial early step. The smart choice can iron out the turbulence, leaving nothing but the promise of blue skies unfolding before you. So, how can you differentiate a quality commercial real estate broker from one struggling to find their footing in the rapidly changing CRE market? These 10 questions will help!
(1.) “Are You Experienced?”
If it’s good enough for a Jimi Hendrix album title, it’s good enough to kick off our list of questions you should ask your potential commercial real estate broker. Whether leasing office space, buying your next warehouse, or throwing down a considerable amount on a multi-use strip mall, you’ll want an experienced broker to make sure every move is a direct hit. The more your broker understands about the local market, the better. But you should also measure a broker’s confirmed track record of success. Asset classes matter too, so ask about your broker’s history with your preferred asset class types.
(2.) “What Type of Client Do You Represent?”
Does your preferred commercial real estate broker work with investors like you? Not every investor is the same. You’ll find some are career landlords, coming at a deal from a property management angle. Others are tenants looking to move into a place of ownership for a business. Determining what kind of commercial real estate broker to trust with your investment future will help avoid conflicts of interest or a misrepresentation of your best interests.
(3.) What Kind of Deals Has Your Commercial Real Estate Broker Closed?
You can get a good feel for a commercial real estate broker’s style by reviewing past transactions they’ve closed. If you’re thinking of working with a prolific broker, you may need to specify that you’d like to see transactions similar to what you had in mind. Think along the lines of location, square footage, pricing, etc.
(4.) What’s Your Broker’s Realty Style?
What types of strategies does your potential commercial real estate broker employ to secure success in a transaction? For example, some brokers are confined to working from the MLS. JohnHart Commercial Real Estate enjoys the added benefit of access to off-market listings, giving our clients a distinct advantage. But this is just one example of avenues that can augment a broker’s realty style. By taking a scrutinizing look at their process, you can get a decent understanding of their network size and their determination.
(5.) “How Do You Expect to Be Compensated?”
This has become a hotter topic in the wake of last year’s lawsuits against NAR. While the standard agreement with a commercial real estate broker sees them being paid by sellers or landlords, you shouldn’t simply accept this as a given. Demand transparency. Most brokers will be happy to give it to you!
(6.) “What Methods of Negotiation Do You Employ?”
There’s a certain art to negotiation that the best brokers embrace. It pays to find out how your potential broker plans to introduce strategy into negotiation. Ask them how they plan to fight for your best interests. What’s their stance on contingencies, terms, or securing the price you want? The more details you know going into the journey, the better!
(7.) How Does Your Broker Plan to Stay in Touch With You?
The right commercial real estate broker for your investment future should be easily accessible, accommodating, and communicate details to you clearly. You’ll need to move at the speed of real estate, which can be deceptively quick. Having a responsive, reliable broker is integral to keeping things flowing forward seamlessly. Missing a lead or an offer could jeopardize the deal, so work out your lines of communication early on.
(8.) Do They Know Local Zoning and Land-Use Guidelines?
There’s no way around it: your choice of broker needs to understand local zoning laws, land-use regulations, and relevant permitting. One misstep can cost you the entire deal or leave you buried under costly fines and compliance repair costs. If your commercial real estate broker isn’t well-versed in zoning and land-use, or at least employing a trusted consultant, it’s best not to even entertain the risk.
(9.) Is Your Proposed Commercial Real Estate Broker a One-Person Show?
Are you hiring an individual broker working on their own, or a team of broker associates working together? Both have their advantages. For example, an individual broker enjoys a certain liberty that allows them to keep the focus on your needs. By comparison, a team keeps a transaction in motion with more resources at their disposal. JohnHart Commercial Real Estate uses a support team of experts to offer the best of both worlds: a hyper-attentive professional backed by a resourceful team. Ultimately, it’s up to you to decide which system works best for your intentions.
(10.) “Can You Please Provide a Few References?”
As with pretty much any professional service, you’ll want client references. A commercial real estate broker with nothing to hide will be only too happy to direct you to past clients who have plenty of praise to share. Do your best to connect with these clients so you can hear these accounts from the source.
Credentials are useful, but they can’t give you the full spectrum of what it’s like to work with a commercial real estate broker. Use these 10 questions to coax a clearer picture into the light so you can move forward with your transaction in unwavering confidence. In the end, you’ll need someone you can trust to understand every nuance of your entrepreneurial vision. Supported by a carefully chosen broker, you stand to profit from discerning guidance that will lead you through each savvy decision on the way to your unique goal.
