If anyone ever told you that you cannot negotiate during a commercial real estate transaction — ignore it. This idea is false, but it is true that there are certain steps you need to take to successfully negotiate during the purchase of commercial real estate. If you are in the market for a new property, learn more about what a successful negotiation looks like.
Identify the Market
It is especially important for you to do your research to identify the status of the market before you attempt to exercise your negotiation skills. This step is so important because the status of the market will help determine just how much power you have. For instance, in a seller's market, your power may be limited, whereas in a buyer's market, much of the power of the transaction is in your hands. A real estate agent can help with identifying the market.
Commercial real estate owners are often very business-savvy people. As such, if you plan to get anywhere with your negotiations, be prepared to present evidence. For example, if you are attempting to lower the purchase price, market data or case studies reflecting the true value of the property or showing a coming decline in property values will be especially helpful. Again, a real estate agent is especially helpful with this step.
Set and Stick to Your Parameters
Set paraments for what you will or will not do as part of the sale. If you do not set this threshold beforehand, your negotiation efforts may not be as successful as you would like. More specifically, you need to establish the most you would pay for the property as well as what features you will be unwilling to compromise on. Having this information beforehand makes the process so much easier.
If you find a seller who is willing to negotiate with you, the worst thing you can do is be unresponsive. Consider a scenario where a buyer submits a request to lower the purchase price and their agent contacts the buyer to inform them, they typically have a limited timeframe to respond, for example. If the buyer ignores this timeline, more than likely, the deal will be off the table. Be committed to being responsive and staying in contact with the agent to push the deal through.
A partnership with a real estate agent combined with these skills will put you on a path to success. Be sure you have all your information, and you are prepared to close the deal with your needs in mind.
Reach out to a realtor familiar with commercial properties for sale in your area.