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Low-ish Price Real Estate Transaction - Broker Use #5329913 01/22/20 09:36 PM
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JHZR2 Offline OP
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I’m looking to buy a piece of commercial/industrial real estate. It’s right off the interstate, but not close to much - ideal for me. Just a few acres with a workshop building. For personal use.

It’s not a big transaction, and I think the asking price is about 30-40% over what it should be. I have rationale.

At what I think is a fair price, there’s not much commission in it. If split between two brokers it’s pretty small, like low thousands of dollars.

I’m not a RE investor. I own my house, I’d have a cash deal. I don’t have a broker if my own. Frankly, I’d prefer to just go talk to the owner, but they are using an agent...

I need to negotiate the value down. Since there’s not much money in the deal, and it’s been on the market for a while, am I better off just working with the listing agent? I’m not opposed to paying a buyers agent even out of my own pocket, so they truly represent me (since a buyers agent paid by the seller’s commission really represents the seller), but there’s not much money in the deal for them.

So what’s best practice here?

Re: Low-ish Price Real Estate Transaction - Broker Use [Re: JHZR2] #5329922 01/22/20 09:54 PM
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WhyMe Offline
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if its a cash deal and you know the price you want to pay , i would just have a meeting with the agent and make your offer

Re: Low-ish Price Real Estate Transaction - Broker Use [Re: JHZR2] #5329923 01/22/20 09:55 PM
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Win Offline
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Negotiate the price on your own; let your lawyer represent your interest in making the paperwork right and that you're getting a marketable title.


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Re: Low-ish Price Real Estate Transaction - Broker Use [Re: JHZR2] #5329927 01/22/20 10:02 PM
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Often commissions are split about 3% each for buying and selling agent. If you go with the selling agent (if allowed in your state) only for the purposes of doing the buyer's paperwork, there is usually a fee of a few hundred dollars to 1% or so. That difference (3% vs 1%) is extra money the seller does not need to pay out of their pocket, so their take-home can be the same with a slightly higher selling price (less buyers agent commissions).

You could find out from county records who owns the property and call them directly. They may or may not react well to that.

I would call their agent and express interest and go from there. They will ask if you have an agent. You can say no, that you would prefer not to get one, but you will if you need to. If it has been on the market a while your chances of them coming down are better.

Re: Low-ish Price Real Estate Transaction - Broker Use [Re: JHZR2] #5329935 01/22/20 10:16 PM
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Just make an offer to their agent. Keep it as simple as you can. It's going through escrow right?


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Re: Low-ish Price Real Estate Transaction - Broker Use [Re: JHZR2] #5329939 01/22/20 10:19 PM
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After watching Louis Rossmann’s ordeal with commercial real estate, I wish you all the luck in the world.


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Re: Low-ish Price Real Estate Transaction - Broker Use [Re: wallyuwl] #5329947 01/22/20 10:40 PM
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hallstevenson Offline
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Originally Posted by wallyuwl
You could find out from county records who owns the property and call them directly. They may or may not react well to that.

When you buy or sell a property and have an agent, you will have signed a contract that keeps them included for an agreed period of time.

Re: Low-ish Price Real Estate Transaction - Broker Use [Re: JHZR2] #5329962 01/22/20 11:49 PM
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ecotourist Offline
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In this area the seller pays a sales commission which is divided between the buyer's and seller's agents.

In this situation I would have my own agent. Where there is only one agent (who will get both sides of the commission), who is their main customer? Probably the one who is paying the bill (ie the seller) I'd have to think.

My daughter bought a house where her agent was the same as the seller's agent. She feels she was pressured to pay more than necessary. And there were problems with the house (as an example vermin in the attic where there was physical evidence that the owner had been trying to deal with them, and yet had said there was no problem with vermin in a mandatory seller's report). I'd want my own agent helping to resolve that sort of issue. Yes you could lawyer up but how about having an agent that puts the arm on the seller to make it right.


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Re: Low-ish Price Real Estate Transaction - Broker Use [Re: hallstevenson] #5329969 01/23/20 12:04 AM
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wallyuwl Offline
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Originally Posted by hallstevenson
Originally Posted by wallyuwl
You could find out from county records who owns the property and call them directly. They may or may not react well to that.

When you buy or sell a property and have an agent, you will have signed a contract that keeps them included for an agreed period of time.

That just means the seller can't dump the agent until the contract term is up. It does not mean a potential buyer cannot talk directly with the seller.

Re: Low-ish Price Real Estate Transaction - Broker Use [Re: JHZR2] #5329980 01/23/20 12:31 AM
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Ws6 Offline
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Originally Posted by JHZR2
I’m looking to buy a piece of commercial/industrial real estate. It’s right off the interstate, but not close to much - ideal for me. Just a few acres with a workshop building. For personal use.

It’s not a big transaction, and I think the asking price is about 30-40% over what it should be. I have rationale.

At what I think is a fair price, there’s not much commission in it. If split between two brokers it’s pretty small, like low thousands of dollars.

I’m not a RE investor. I own my house, I’d have a cash deal. I don’t have a broker if my own. Frankly, I’d prefer to just go talk to the owner, but they are using an agent...

I need to negotiate the value down. Since there’s not much money in the deal, and it’s been on the market for a while, am I better off just working with the listing agent? I’m not opposed to paying a buyers agent even out of my own pocket, so they truly represent me (since a buyers agent paid by the seller’s commission really represents the seller), but there’s not much money in the deal for them.

So what’s best practice here?

I bought, without a broker (I managed, myself, the financial agreements, appraisal, and all aspects of the purchase aside from actual loan documents and financing, as a loan/bank managed that), a piece of property next to me. I literally did the entire job of a real estate agent. Negotiations, contracts, the whole 9 yards.

I am NOT a real estate agent by trade or hobby. This was the first time I had ever en-devoured to do that. At a 7% commission rate, it shaved $5K off of the deal. The person I bought from drove me up the wall with their absolute obtuseness. By the end of the deal, I questioned if it was even worth it, and I told them as much when they began another fit about "but can't you pay me more???" I hated it. I hate dealing with people, but money WAS involved, and I WAS being "paid" in the form of $5K that I didn't have to account for in the overhead/their wheedling for more money.`

If you have a strong stomach and common sense and the ability to work with people even when you hate them, then yes, you can easily do this on your own. The best way to initiate it, is to talk to the owner expressing interest, and then when they direct you to the agent, tell them that since you have not contacted their agent, they won't have to take a commission out of their profit, which means they will make more on the property. If this doesn't inspire them, then you also have learned that they are VERY willing to take an L via negotiations, as apparently 7% of the sale isn't anything to them...EVERYTHING is a negotiation/intel.

I turned part of the land into a shooting range, BTW, and yes, I do enjoy it. It also doubles the water frontage of my property.
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Re: Low-ish Price Real Estate Transaction - Broker Use [Re: JHZR2] #5329982 01/23/20 12:38 AM
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You either pay a Real Estate Agent or an attorney. Most people prefer the Realtor option.


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Re: Low-ish Price Real Estate Transaction - Broker Use [Re: JHZR2] #5330003 01/23/20 03:38 AM
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eljefino Offline
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Consider any environmental liabilities you may be taking on. A Phase I is a couple thousand bucks and potentially worth it.

Contacting the seller directly is a moral quandary for the seller, and none for the buyer, IMO.

Re: Low-ish Price Real Estate Transaction - Broker Use [Re: Win] #5330018 01/23/20 05:11 AM
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Mr Nice Offline
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Originally Posted by Win
Negotiate the price on your own; let your lawyer represent your interest in making the paperwork right and that you're getting a marketable title.

+ 1000000 %

Re: Low-ish Price Real Estate Transaction - Broker Use [Re: JHZR2] #5330051 01/23/20 07:11 AM
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I would do two things although I'm not a realtor but have some limited experience in this.

First even though it's not going through a bank I'd get an appraisal done. Most buyers would use a bank and it won't sell for more than what the bank appraises it at. If this property has sat for a while and you think it's worth significantly less, then having a professional opinion that it's worth less goes a long way.

Maybe get a commercial real estate lawyer. For a while years ago I looked into buying a building that had an operating restaurant. I read many times that buying commercial real estate is different than residential real estate. Since this is for personal use this is less of a requirement but maybe they will see something that will avoid headaches if/when you decide to sell it.


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Re: Low-ish Price Real Estate Transaction - Broker Use [Re: JHZR2] #5330061 01/23/20 07:27 AM
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GON Offline
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Never negotiate on your own, unless that is your profession, and even then, don't do it.

One of the biggest rules of negotiation is to have a buffer between you and the other party. The Selling Broker/ listing agent gets to ask the Seller. It is very unlikely the listing broker will refund some of the contracted commission, and in some states it is illegal.

If you want to deal directly with the Seller, and you are sure the property won't sell, wait for the listing to end and then contact the Seller/ Owner. In many states, by contacting the listing agent, a relationship was established.

Unless you are a real estate subject matter expert, always have some represent you. Their are quite a few attorneys that are also licensed real estate brokers. Find one and speak with him/ her. I promise it will be worth your time. And never present an offer yourself. Have another party do it- like a attorney or real estate broker, even your Dad, anyone..... never present the offer yourself on a major transaction.

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