Whether one is looking to buy, lease or list a property to be marketed, selecting the right licensed professional is the first step.
Real estate agents, brokers or whatever you want to call them, generally get a bad rep. Sort of like lawyers and used car salespeople, it’s pretty easy for one to conjure up an image of an untrustworthy someone you are stuck with, who in the end is only there to sell you a bill of goods and collect a check without a lot of effort. Unfortunately, there are bad apples like that in all professions, and the styles they possess become legendary to the point that the images of entire industries are tarnished … is there a real estate equivalent to Saul Goodman as in the TV series Better Call Saul?
So, how does one find the right commercial real estate representative?
Step 1 – Define your needs
This goes beyond saying to yourself that you want to sell your property or lease a warehouse. Beyond that you need to get a good idea of what you actually know about the CRE market and even more so, what you don’t know!
For example, let’s say you own a 20,000 square foot warehouse located in Frederick County. You’ve been operating a moving and storage business out of the building for 30 years, and you’ve found a buyer for the business who will merge your operations into his current facility. All you have known is moving and storage, but now it’s time to sell, reinvest the money and retire. That’s what you know.
What don’t you know? Consider the following questions:
Zoning: What is the zoning classification and has anything changed in the last three decades that could have made your use or some other obvious use nonconforming? What are the ranges of uses that are available to a subsequent buyer?
Market Conditions: Is there a demand for property like yours? Have other properties like yours sold recently? Would it be better to sell or lease the building?
Taxes: A sale could trigger a capital gain tax tsunami. Would it be better to lease the building, trade the equity into another property or properties by taking advantage of Section 1031 in the IRS code, sell and hold financing or just take the cash from a sale in one lump sum and pay the taxes?
The odd thing about this step is that without the proper assistance, you may never learn what it is that you don’t know … and that’s where the next step comes into play.
Step 2 – Select a CRE Broker
More often than not, the first phone call is to someone in the business you know, who may or may not be qualified to do the best job for you. In addition, checking with others who may have recently used the services of a commercial real estate broker to get a few recommendations or your lawyer, CPA or others in a related field. At some point along the way, you’ll want to surf the web using specific terms or keywords like Frederick Commercial Real Estate Broker or some other phrase that is specific to your situation.
So, gather a few names and make some preliminary calls. If the chemistry feels good offer an invitation to visit you at the property.
Interviewing a commercial broker really isn’t that much different than hiring a contractor or interviewing a candidate for a job, however, in this case, you’re looking for a trustworthy consultant as you are someone who can find a buyer for your property; so, be sure to check references.
If you make the interview all about telling the broker what price you expect and the fee you are willing to pay, you may very well end up with an unqualified order taker … who happens to have a real estate license.
Selecting the firm is often just as important as picking the individual you chose. Clearly, you will want to settle in with a seasoned professional who is familiar with the local CRE market and, in your case, is experienced in dealing with marketing warehouses. But, is other knowledge and expertise available through the resources within the firm he or she is affiliated?
Not to take anything away from the property owner, but in the case of MacRo, Ltd., we like to position ourselves as a trusted confidant and team member who has the ability to provide a level of expertise and creativity to the uniqueness of the situation through marketing the property all the way through to negotiating a satisfactory deal that fulfills the clients’ goals.
Your commercial real estate broker should be able to profile the type of buyer for your property, and he/she should be able to explain how a marketing program will be structured to identify such parties.
Since all properties and buyers are unique, your broker should know the nuances of the local CRE market – uses allowed under zoning classifications, comprehensive planning as well as appreciate the particular features that your building has to offer. He or she should have good connections to legal, tax, architectural, engineering, government and other related resources, who could be available to answer more complex questions or address potential issues that could stand in the way of finalizing a buyer’s decision to move ahead.
The right broker should always be willing to be held accountable to the commitments he or she makes and be available to go over and above your expectations to see the transaction all the way through to the transfer or title … often beyond that.
When it is all said and done, you’ll be glad you didn’t Call Saul.
Rocky Mackintosh, President of MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland, has been an active member of the Frederick community for over four decades. He has served as chairman of the board of Frederick Memorial Hospital and as a member of the Frederick County Charter Board from 2010 to 2012. He currently serves as chairman of the board of Frederick Mutual Insurance Company. Established in 1843, it is one of the longest enduring businesses in Frederick County.