Echo Commercial Properties – What We Do Part 2

Welcome to part two in the series “What do ya do?” In part one, we explored what we do to be active participants in commercial real estate. We focused on search, communication, and creativity. Now, let’s turn our attention to the contract phase of our job. This is the Echo Commercial tip of the week.

A large part of our job is making sure that our clients pay the right price for the property or opportunity that they are trying to acquire. If representing the seller, we must figure out the right price range that will spur activity and a subsequent offer. All roads lead back to knowing the terrain.

Just like in residential real estate, we must be knowledgeable of like properties. But our job now goes further in understanding zoning rules and regulations, potential tax incentives and appreciating the environmental impact of not only what is there, but what is ALLOWED to go there.

A commercial negotiation has many levels to it. Phase one is an LOI, or letter of intent. This is used to let the seller know you are serious about doing business and fleshes out some basic terms before moving to the contract. Since there are many things to analyze to know just how much a property is worth, an LOI spells out the specific parties involved, the time limits to each part of the due diligence, the base commissions and the amount of deposit. A letter of intent is designed to create a positive expectation from the start so that both parties are properly engaged in the process.

Appreciating that a good result is achieved, a proper contract between parties will be drawn up by a lawyer and presented for negotiation. Commercial contracts can be monsters. Fifty or sixty pages in length is not unheard of, so a lawyer is very important here. In some cases, agents may have a juris doctorate. However, in most, outside council is required to stay withing the ethical and literal framework of the law.

So, navigating the legal part of the transaction is a very important component of what we do. We help the clients employ proper legal representation so that their interests are looked after. Meticulous, detailed…and oftentimes not very exciting: part two is not glamorous, but very important in helping get your clients to close. In Part three, I will show how I help guide our clients to retain the right parties to inspect and value the properties that they are interested in during the due diligence phase. Again, it’s what we do.

Howard Freedland is our Echo Commercial Properties Real Estate Specialist. As an independent wine broker, Howard has executed international deals with corporations and conglomerates. While working with Echo Fine Properties, Howard is a part of a team currently managing the interests of national and international companies wanting to secure land and property in South Florida. All of his prior business experience has brought him to this point as a professional, effective real estate leader. You can contact him on 561.889.2735 or [email protected].

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