CHAPTER 12 Things to Consider o Consider in Commercial Property Bu operty Buying UNDERSTANDING YOUR LOCAL MARKE CAL MARKET Along with having other realistic property candidates that are comparable, this is how you gain leverage during negotiations. It is a must to be completely informed about your market prices before you go into negotiations. Your broker will be a massive help to you in this department, but having your own knowledge is important as well. You need to work with your broker to get comparisons of properties that have sold in the area in the last year or so. Pick out three or four choices that can work for your company’s purchase. Compare your main candidate to those and a few past sales in the area. That gives you a good starting point to open negotiations. Reach out to the owners to see how much down payment is required before you get approved for the loan and other specifics. This will lead you to get an early benchmark on the market and the surrounding area’s average prices. You should do this before performing a detailed financial analysis. This step is just to get a quick feel for your market. You don’t want to pay for a financial analysis until you’re almost set on choosing a spot. This is much earlier. When you have these options, you’ll know where to start negotiations and how to address the owner immediately. Then narrow your choices down to one or two, and do the detailed 66
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