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Conducting Commercial Real Estate Transactions
September 8, 2009
Whether you are buying or selling a commercial property, you need to get the best value for your investment dollar. A real estate brokerage can be instrumental in bringing qualified buyers and sellers together.
By Bob Helyar
Whether you are interested in buying or selling a commercial property there are always two options available to you – using a brokerage house or completing a private transaction. If you are selling your building and already know someone interested in purchasing it or if you are interested in buying a specific building and have the contacts for it a private transaction may be in your best interest.
If, however, you would like to sell your building and attract the highest possible offer or if you are interested in getting the best investment possible for your funds; using the services of a brokerage would be to your advantage.
A brokerage or a brokerage firm is a business that acts as a broker. A salesperson working for a brokerage firm is popularly (but incorrectly) called a “broker.” A broker in that context is, strictly speaking, an exchange member who actually executes the purchase or sale as a service to the client of the firm for which that sales representative works.
A real estate brokerage attempts to do the following for interested buyers of real estate.
• Find real estate in accordance with the buyer’s needs, specifications, and cost.
• Takes buyers to and shows them properties available for sale.
• When deemed appropriate, prescreens buyers to ensure they are financially qualified to buy the properties shown (or uses a mortgage professional to do that task).
• Negotiates price and terms on behalf of the buyers and prepares standard real estate purchase contract by filling in the blanks in the contract form.
Upon signing a listing contract with the seller wishing to sell the real estate, the brokerage attempts to earn a commission by finding a buyer for the sellers’ property for highest possible price on the best terms for the seller.
To help accomplish this goal of finding buyers, a real estate brokerage commonly does the following.
• Listing the property for sale to the public.
• Preparing necessary papers describing the property for advertising, pamphlets, web site listing, etc.
• Advertising the property. Advertising is often the biggest outside expense in listing a property. A brokerage has a marketing team that is able to prepare an effective marketing campaign customized for your property.
• Ensuring there is a contact person available to answer any questions about the property and to schedule showing appointments.
• Negotiating price on behalf of the sellers. The seller’s agent acts as a fiduciary for the seller. This may involve preparing a standard real estate purchase contract by filling in the blanks or assisting in preparation of a purchase and sale agreement that is acceptable to both parties.
• In some cases, holding a deposit cheque in escrow from the buyer(s) until the closing.
A brokerage may specialize in specific markets such as land opportunities or they may have sales representatives that specialize in these markets or can provide expertise in various geographical locations.
Using the services of a brokerage will certainly increase the exposure and opportunities provided to you!
This article appeared in the November 2007 issue of Canadian Property Management.
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