Dealing With a Commercial Real Estate Agent

[SFChris]

Hello All,
Did people here work with a commercial real estate agent to find their property? Here in the United States, I am guessing very few CR agents even know what a backpacker's hostel is. I haven't even found an agent yet, but I am already envisioning lots of frustration trying to get one of those types of people to understand my needs in a property.

I would love to be able to do this on my own, without dealing with a CR agent, but there are a lot of zoning issues and other bureaucracy that I do not understand that well. Also, should you allow your CR agent to help you look for a lender, or is there an inherent conflict of interest there?

I would love to hear anyone's advice/stories of how they dealt with this.

[mordcomm]

Hi Chris,

Ahh, this is a question I have a lot to say about!

We are actually going through this right now in New York and the last few months have certainly been a learning process.

As a whole, you are right. Most brokers do not really understand what you are looking for. However, that's not even the biggest issue. The big issue is that when you are looking for a specific property that doesn't fall in a neat category, such as "apartment" or an "office", most brokers don't want to spend their time on this. It's too complex, it requires too much research, and it typically means that they'd need to go outside their own listings and look into others.

Over the last two months, we've worked with about 20+ brokers. Even though many advertise that they have access to all properties in the city, the reality is different. YOU are the one that ultimately has to go out and dig and find the properties that are suitable. Even though you'd think that for a $30-50K+ commission (that many of them would get), they would do the research for you, more often that's not the case.

That being said, we did find a small handful of agents that are doing their job. They understood our needs and are making an effort to find properties for us. There is one in particular that we got along with. But even in his case, we often end up looking for spaces ourselves and then simply emailing the ones we like to him, so that he'd simply represent us (schedule showings, negotiate on our behalf, etc.). Since it doesn't cost us anything (landlord pays the commission), we might as well have an additional party on our side.

By the way - you won't avoid dealing with agents. Landlords pretty much always have somebody representing them, so even if you find the property on your own, you'll still be working with the landlord's agent.

As for the zoning, well - the short answer is that there is no way around it. You can (and should) talk to an architect and a lawyer from the very start. But, at the end of the day, you have to be the one to do the research and find out what works and what doesn't. Even many lawyers and architects we've been dealing with don't really understand our requirements. You'd be amazed how much you'll learn in a month or two

If you have any other questions, I'd love to help where I can.

Boris

[KrazyBackofficeAnimal]

From my experience in the Czech republic, real estate agents have no clue neither about their business nor about the object that they want to sell. I am not exaggerating. Even monster real estate guys (LEXXUS for example) who actually are devepolers at the same time are pretty messed up in the head. A lot of times the agent just does not know the answer to some simple questions, like type of heating or form of ownership of the property... I am pretty convinced though that it only works in CZ that way. And yea, most of all, they do charge big time for their undelivered services.

One thing you should defenitely be prepared for is to give them one big bag of cash

[santa klaus]

From my experience in the Czech republic, real estate agents have no clue neither about their business nor about the object that they want to sell.

I can confirm that!

[Tinker's Station]

From what I understand (I'm the tech guy), we lucked out to a certain extent because we are zoned for mixed residential/commercial. The only problems we had were appraisals because nobody else around us had a comparable building for both residential/commercial. I guess when you have a city of 100 people, that limits the number of similar properties...

[SFChris]

Thanks for your responses! Mordcomm, I will probably have more questions for you in the future as it sounds like you have had to deal with a lot of things that I may have to deal with. Over the last couple weeks I have walked around the city a couple times just looking for "for lease" or "for sale" signs and trying to visualize whether a hostel would work there.

I already have a good idea of what neighborhoods, and even what streets I like, and I have lined up a fair amount of financing, so I think the next priorities are architect, lawyer, and finding a commercial real estate agent.

Krazy...Animal - I hope they're not that bad here! ahh, that sounds horrible.