A seller had sold a $950,000 building to a buyer and the contract was signed. The final closing was in a month and the buyer had already paid $60,000 upfront. He then ran into a snag in his financing. He was depending on selling another building to get approval for it, something that did not go through. Because he was working with an experienced broker who had dealt with these situations and also had many partners to refer him to, the broker was able to extend his contract holding period up to 120 days. However, fees start coming in at 90 days, when closing would take place. The buyer’s own agent negotiated a raised sales price of another $10, 000 to buy their client some more time. The buyer then sought other financing options from a partner that his broker referred him to. The lender worked out a deal on the loan because of the relationship they had previously had with the broker. The loan was given to the buyer, but after (and if) the buyer sold his other property, the structure of the loan would dramatically change. This ended up costing the buyer $10,000 more but he did eventually sell his property, improving the loan’s structure. The deal was about to fall through the first time the buyer was denied the loan. The $60,000 guaranteed $15,000 of that, so if the deal did die, the buyer would have lost that money straight up. Due to the broker’s negotiations and close relationship with the lender, the deal was able to be saved for both parties. This is just one story that showcases the need for a commercial broker. With experience and partners, they have what it takes to save a deal that otherwise seems dead. I hope you become familiar with the world of commercial real estate purchases and all of its aspects after reading this book. It will put you on the right path to planning and navigating the process.
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