Skyscraper Group, Inc. offers professional commercial real estate buyer representation services. Our specific goal is to add value to the transaction by saving you time and money and to assure the very best property is acquired at the best price.
The four primary advantages afforded to clients looking to buy real estate with a knowledgeable broker representing them throughout the process are outlined below:
1.) You obtain superior market research and access to local connections. The opportunity to see more and better properties with someone that is dedicated solely to your team, and that also has the requisite familiarity with market information such as a market’s rents, vacancy rates, expenses, cap rates, financing, and local protocol is invaluable. Additionally, the buyer gets to tap into the buyer broker's market data and real estate network, where knowledge about available property, local listing brokers and their reputations, and other third party resources is readily available. A good buyer broker also keeps tabs on properties that were marketed unsuccessfully as well as pocket listings, building owner names and their contact information, and will be knowledge about new real estate developments coming into a market, or that are pending approval. You have the best chance of getting a property that has not yet been placed on the market yet when working with a knowledegable buyer's agent as well. Once a buyer's agent understands your needs they can canvas the market's property owners to see if they are willing to sell their property or not. In addition, we cut through the vast amount of online data in an efficient manner for our clients, allowing them to focus on running their business, not hunting for space on their own. Our company subscribes to a number of very expensive yearly-subscription databases (costing several thousand dollars a month) that most typical buyers are simply not going to pay for, and thus will not have that information available to them to find the best deals. Because we are active in the market every single day we can afford the major cost of this data.
2.) Skilled negotiating combined with unparalleled financial analysis capabilities. This ultimately leads to making better informed decisions for buyers. A good buyer representation broker should possess the necessary financial skills necessary to understand the consequences of various alternatives. We assist buyers by estimating income and expenses and running projections so they can make informed choices. This may include conducting rent surveys as well as doing a line-by-line expense analysis so that clients can see alternatives using major decision criteria, such as cash flow, internal rate of return, net present value, and future wealth. We also dissect the listing broker's materials to watch for misleading or optimistic financial projections that could steer a buyer towards paying too high a price for a target property.
3.) The assurance that the agent is working in the buyer’s sole and best interest. In short, you will have a dedicated and loyal consultant that works soley for you with your best interests in mind. To be successful, you must have best consultant on your side, with the highest level of integrity possible. There is simply too much money at stake to do anything less.
4.) In the majority of cases it doesn't cost you anything. Because most properties in the market already have a listing agreement in place with a listing broker that provides for paying-out commissions to a procuring broker (buyer representation broker) at the close of escrow, the buyer's broker commission is already baked-into the asking price that the seller is looking for at the onset.
The contractual relationship is of course also beneficial to the buyer representation broker. Buyer representation brokers can turn tenuous possibilities into profitable deals by employing an appropriate written agreement with their clients. Simply put, they are business arrangements: A broker agrees to represent a buyer who agrees to use the broker’s services exclusively during a specified time period. Instead of listing a property, a buyers broker, in effect, lists the buyer’s cash and buyer requirements. Competent buyer broker agents recognize that a great deal of time and work goes into finding appropriate investment properties and that they should be paid for this work. It works as a screening tool, rationing time and involvement by investing in a few key clients who are willing to pay for a broker’s expertise in the unlikely event a commission is not on the table from the seller. If the buyer's agent is providing good service, then the target property's negotiated price should be low enough to make the commission something valuable to be paid for, if necessary.
Like other fee-based services, a proper contract benefits both brokers and clients. Successful commercial brokers require a written exclusive agreement to represent buyer-clients.
Brokers are selling services, regardless of the type of property the buyer seeks, and those services do not change. No special work is done until the client has hired the broker. After the broker and client agree on compensation, it becomes a non-negotiable point. In most cases, the broker’s fee is the same as the standard arrangement — half of the most common listing fee in a given community — which is what the seller would expect to pay the agent representing the buyer.
By signing the broker’s buyer-representation agreement, the buyer becomes the back-up payment source, agreeing to cover whatever part of the commission the seller does not. However, in most buyer's broker transactions, the buyer does not pay any part of the fee. Buyer representation fees that our firm requires, generally run between 1.5% to 3.0% of the sales price, depending on a variety of factors. We only provide this service to those that are, or become, our exclusive clients, and, those which are also verifiably pre-qualified.
The following is a brief summary of our approach to buyer representation process:
Planning - Before a facilities plan can be formulated, a thorough review of the existing lease or ownership situation is imperative. Important dates are identified to verify that all parties are aware of existing options, notice provisions and obligations. Economic benchmarks are established to compare future relocation and optimal acquisition terms.
Market Review and Evaluation - With the organization's goals and objectives in mind, we develop a list of the most suitable options and the advantages and limitations of each. Pertinent industry trends including vacancy rates, new construction, supply/demand, recent sales and other market information is compiled and analyzed. Facility/property tours are conducted and the preferred options are "short listed."
Comparative Financial Analysis - We compare the costs associated with each option over the life of the lease or acquisition in several ways: monthly/annual expense, rent escalations, operating expenses and real estate taxes. We calculate the present value of each option and if appropriate, we will prepare a lease versus own comparison. A detailed summary is developed, highlighting key economic and non-economic concerns. Specific client concerns are also incorporated.
Comparable Sales Transaction Research - Real estate consultants are only as good as the information they provide and successful transactions are guided by accurate market information. Years of experience, relationships, and volume of transactions creates this strong market information. This helps make the most informed decision, and enables us to negotiate the best possible terms.
Letter of Intent - After several rounds of negotiations among competing sites, the preferred building and/or property is selected and letter of intent terms are negotiated. During this phase, we solidify key business and legal issues, and lay the groundwork for smooth purchase negotiations. Since this is the foundation for the final agreement, we take extra care to incorporate important provisions.
Document Review - The purchase agreement is reviewed and negotiated to verify consistency with the Letter of Intent. The primary goal of this phase is to protect our clients’ interests by identifying problematic provisions. We strongly recommend document review by competent legal counsel during this phase before signing a sales contract.
The steps in the buyer representation process for our clients are as follows:
1.) Prepare an exhaustive survey of the market to identify potential buildings for purchase.
2.) Provide a detailed economic analysis comparing the various options.
3.) Once a target building is identified, negotiate to achieve the most favorable economic terms,
4.) Negotiate a purchase contract that provides strong protection and favorable inspection contingency clauses. Certain contracts will require strong contingency provisions, and we work hard during the due diligence period to thoroughly understand and document the property's various strengths and weaknesses. We want our clients to enter into purchase transactions with full knowledge of any potential issues or concerns.
5.) Assist with due diligence efforts, including scheduling or obtaining:
- title searches and survey review
- building inspections
- planning & zoning reviews
- environmental surveys (including Phase I, asbestos and/or mold inspections)
- cost estimates for any required construction or site improvements
- sources of financing and appraisals
- We have developed a thorough, documented process designed to create maximum value for our clients. We understand that purchases of commercial facilities are an important, often critical, component of our clients' business success. We take our responsibility in this area seriously and strive to add value to exceed our clients' expectations.
Our key qualities of reliability, responsiveness, integrity, experience, tenacity and enthusiasm means the difference between just completing a real estate transaction and creating a highly effective business solution.
Please contact us to talk to a buyer representative or to discuss your next project.