Need your thoughts BP community.
Has anyone being a principal or a Broker Rep experienced these demands from listing broker in order to convey your buyers offer to the seller? My gut has been since day one that this listing broker has his own buyer and is trying to cut my offer from being seen.
- Proof of funds for the 25% down payment (this is common, I'm ok obviously with this one)
- More details on the expected debt structure and what lender the buyer would use
- More details on the business model of the investor—things like capex budget, rent growth assumptions, tax adjustment and any other expense variations, etc.
- Broker references from brokers that represented sellers that XXXXXX Investment Group bought deals from in Ohio and/or texas.
- In addition, when we have requested a tour: Principal of investment group must personally tour the property prior to offer, not a representative of the principal, even if it's someone from the group.
Love to hear your thoughts before I respond to this Broker. My client are an investment group that made an offer of 95% to asking price for a multi unit in a mid to high crime area with C-D tenants. And this is the response... (that's besides the point, wanting to know if anyone has been asked for these items prior to their offer being shared with the seller)
this is common in the world of commercial real estate.. Most commercial deals are sold by the listing broker.. if its then out to the brokerage community its not a great deal or its a tough to sell prop.
But yes these are all reasonable.. no one wants to waste their time with tire kickers.. and you certainly do not want to either.
only thing I would questions is the on going cap Ex etc.. unless buyer is looking for some seller finance then that would be expected...
this is not the world of phoney wholesalers who have no money trying to flip houses..
In addition with myself and selling my personal product I get into the home buyers lender info.. there are certain lenders I simply will not allow my properties to be tied up with .... I reject the offers.
@Jay Hinrichs I can't thank you enough for your input. You've put my mind at ease...
I provided the lenders details. Wells Fargo services a large portion of my clients portfolio and would be lending on this $7M purchase as well.
Again, thank you.
Updated over 1 year ago
I asked Jay about his comment "only thing I would questions is the on going cap Ex etc.. unless buyer is looking for some seller finance then that would be expected... this is not the world of phoney wholesalers who have no money trying to flip houses.." if he was referring to lender financing or just seller financing... Sorry I edited this out after posting because I figured out the answer myself. But he answered. Response below
@Laura Renner I am not a commercial expert having only sold a few 5 to 6 million dollar buildings as a broker.. and I have personally never seen it.
what I have seen is
1. not a lot of help from listing agent as they want to double end it .. if they can
2. proof up both cash and financing before they will even entertain a offer.
3. you can walk around the property but until you have lifted your contingencies and the only one left is inspections.. you can have a quick run through which is generally outside inspections and basic plumbing in select units.. this is not full blown home style inspections.. can't bother the tenants that much.
sounds like your buyer is experienced in C and D... if they are not they are going to lose there butts LOL.. those are the toughest properties to make work in the US.
@Jay Hinrichs so much for what is in the sellers best interest, right? Lol yes I agree with you about lower rated communities/areas. I normally would never advise my clients to offer so much on these type. I'm finding investors getting hungry and considering them now since there are so few options with any decent numbers here in South Florida.
lastly make sure you protect your self on the commission these are not MLS deals usually and you MUST write your commission in on the sales contract that the seller signs.
I have seen brokers get screwed out of their commish at the end when they thought it was like a resi transaction... and the other broker took both sides since the procuring broker did not put in a commish demand... its cut throat out there in Commerical.. for sure.. but I am sure you will get it worked out...
I understand how others are trying to get deals and cash flow but going into Hood rats is a good way to lose a lot of money.
@Jay Hinrichs Oh yes and again great advice. I have a commission agreement signed along with buyer registration prior to bringing an offer or touring.
It's a shame there isn't simply a standard policy of how to execute offers in a non-bias way and in the best interest to all parties. Well..until that fantasy happens, I agree, stay on your toes.
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