How to Be Your Own Agent and Not Regret It

This article originally appeared in Inside Business - The Hampton Roads Business Journal, on July 20, 2015.

The task of buying, leasing, or developing commercial real estate is daunting.

With so much at stake and so many complex decisions to make, business owners are reluctant to take on too much of the process themselves. To be sure, in many cases hiring a trusted commercial real estate agent can be the best option for a business owner.

But for some, being detached from such a vital business decision is unthinkable. Moreover, not all business owners can afford paying professionals to provide real estate solutions.

For business owners willing to engage the process, we offer ways you can be your own commercial real estate agent without making mistakes - before you pay other people.

Evaluate Your Plan

Remember, you are making a strategic business decision, not a real estate decision. Your business strategy should determine your real estate moves, not the other way around. For example, an established business looking for a long-term location with equity potential would likely consider ownership, whereas a start-up retail shop business would generally seek a short-term lease. Since no outside professional can tell you more about your business’s strategic plan than you, be sure you understand how the real estate transaction fits in.

Do Your Research

There is plenty of useful information available on the Internet when you become your own commercial real estate agent. Online resources like the local Multiple Listings Service, LoopNet, Co-Star and even Craigslist can provide free information on available properties in your area. Using a mapping program, like Google or the Geographic Information Systems (GIS) maps available from most local governments, even more area information is available. When doing research, try to find answers to the following questions:

• What is the typical per square foot price for commercial real estate in the region you’re looking at? Use this as a benchmark and to compare multiple properties in your search.
  
  
• Have you factored in all the costs when you calculated how much this transaction will cost? Bear in mind one-time expenses such as moving costs, attorney’s fees, permitting fees, and furniture; recurring expenses such as internet connectivity, landscaping, cleaning, and utility costs; and occupancy costs such as rent, real estate taxes, insurance, depreciation/amortization expenses.
  
  
• What do you know about the neighborhood, municipality, or region you’re considering? Start with reviewing data: population growth, tax rates, crime rates and labor force. Be sure to do a ‘drive-by’ of the neighborhood and building. Talk with as many community and business leaders as you can to ensure the region is optimal for your business.
  
  
• Do you know the local regulations and requirements? What permits will you need? What are some insurance requirements? Signage regulations? Taxes and fees? Safety regulations? A friendly call or email to the local government can go a long way in determining if a property is the best fit.
  
  
• Have you found any federal, state, or local grants, tax credits, or low interest loans that you’re eligible for? Be sure to check for available assistance before closing on a property or signing a lease. Often times, there are resources waiting to help you be successful!
  
  

Choose Your Professional Help Wisely

Even when a business owner acts as their own commercial real estate agent, they are going to need professional assistance in other ways. But be careful - your cousin with a small construction firm or retired banker uncle may not be the right person to help you with major business decisions like this one. Take the time to do reference checks on the professionals you bring on board - a bad lawyer, contractor, appraiser or banker can cost you thousands in lost opportunities or unfavorable negotiation outcomes.

You can save thousands by being your own commercial real estate agent and avoiding the cost of hiring outside professionals. Do as much research as you can, be confident in your decisions, and perhaps most important, recognize when it is worth the money to pay for professional help.

Get more free tips on commerical real estate in our free guide for small to midsize businesses.