Buying Commercial Property


The process of buying a commercial property involves a significant investment of time, money, and energy.

After an exhaustive search that finally produces the perfect property, a buyer now may be faced with difficult negotiations: Your perfect property may attract more than one offer, and you will need a strategy to deal with these competing offers.

Here are five tips for making your offer stand out in a competitive situation:

Price: It’s human nature to look at the final price when you’re considering making an offer to purchase, and it is particularly difficult when you really want that property. In a competitive environment, your ability to negotiate is limited, and you need put your best foot forward.

This may mean offering or exceeding the asking price to ensure that your offer is the most desirable. As well, you may need to consider writing an offer without a financing clause; this shows the seller that you’ve done your due diligence and have already obtained the necessary capital.

Deposit: The deposit amount shows the level of intent you have to purchase the property. A larger deposit demonstrates that you have a greater intent to follow through on the sale process; the seller will appreciate the seriousness of your offer if you can make a larger deposit than your competitors.

Conditions: When you’re not in a competitive situation, you can go to town on conditions – the seller may not have a choice of accepting them. But when you are competing against multiple offers, consider making a firm offer without conditions.

Conditions add a level of uncertainty for sellers, so by minimizing them you remove any potential for uncertainty, and that will make your offer more seller-friendly.

If you do want to include multiple conditions in your offer, your commercial real estate agent will help you decide how to present them for best results.

You might, for example, consider grouping multiple conditions into a single clause. But be guided in this by your agent, who has years of experience in presenting purchase offers.

Time Frames: The seller would likely prefer a shorter conditional period, and you can differentiate your offer by mirroring the seller’s desires. You can shorten the time frame by conducting a bit of ground work prior to submitting your offer; ask your lawyer to conduct a title search on the property. Knowing about any liens and easements ahead of time can help strengthen your offer.

If you are unable to determine the seller’s preferred closing date, your real estate agent will likely advise the seller that you’re willing to negotiate key time frames.

Decisiveness: In a competitive situation, indecision can sink your offer. Going in, you will need to know what your bottom line is and where you can flexible. You also need to know which areas of the offer you are not willing to bend on.

Harriet RobertsonYour ability to make decisions quickly under pressure will play a huge part in the successful presentation of your offer.  Ask an agent or broker for help, you’ll find them well worth it.  Thanks for your attention and happy investing.


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