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 August 1, 1999

HOW TO CHOOSE A COMMERCIAL REAL ESTATE BROKER

Selecting a commercial real estate broker to help you close that deal isn’t that difficult if you take a few simple precautions.

No. 1 on the list is to make sure you’re dealing with a commercial broker. A startling number of people will turn to the same person who helped them buy their new house, thinking that they’re qualified to aid them in a commercial deal as well. That’s like using a crescent wrench to take the lug nuts off a flat — it can be done, but you’d be better off using a tool

made for the job.

While residential brokers are fine if you want a four-bedroom house with a three-car garage, most don’t have the training or the ability to pull off a commercial deal. Go to an accredited commercial broker.

Check out the commercial broker and see what he or she has done. Some brokers may not have been accredited for very long. Ask what they’ve done in the past two years. You want to make sure that the professional sitting across the desk from you is actually doing deals, before you entrust the details of your deal to him. Also, the kind of deals your prospective broker has done should relate to what you’re planning.

Make sure the broker specializes in the area you’re interested in. It’s one thing to buy a restaurant and quite another to set up a light-manufacturing facility. If you’re thinking of buying a restaurant, pick a broker who has done restaurant deals before. Even plans that sound similar can be worlds apart, such as buying land for speculation purposes and buying land for a shopping mall. Each deal requires a specific set of skills.

Before you hire a commercial broker, try to get an idea of what services he or she will provide, especially if you’re new to the process. If you want to buy an office building, you need someone who can handle more than just the offer. Look for a broker who can help you with such matters as financing and due diligence. Make sure he or she can give you help from the start of the project to the finish.

Also, nail down how much time a broker has to give you. Many brokers have several deals in the pipeline at one time and may be unavailable when you really need them, especially for the novice investor.

Make sure you select someone whose personality is one you can work with. You’ll be working quite closely with your broker and seeing a lot of each other. If he or she seems lackadaisical and you’re a Type-A personality, you might be blowing your stack every hour wondering what’s going on.

Finally, keep in mind that every deal is subject to a few minor hiccups. Don’t sweat the small stuff, and remember, a good commercial broker is one who will exhaust every opportunity to achieve a win-win situation in order to resolve minor issues.

Selecting a commercial real estate broker to help you close that deal isn’t that difficult if you take a few simple precautions.

No. 1 on the list is to make sure you’re dealing with a commercial broker. A startling number of people will turn to the same person who helped them buy their new house, thinking that they’re qualified to aid them in a commercial deal as well. That’s like using a crescent wrench to take the lug nuts off a flat — it can be done, but you’d be better off using a tool

made for…

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