1. Just because a property is bank owned or real estate owned (R.E.O.), foreclosed, distressed, or short sold does not mean that it is a good deal. When shopping for commercial foreclosures one needs to be aware of what a good deal is, and that usually means knowing the prevailing rental rates, and comparables.
2. Never buy at an auction unless you are the only person bidding. What is this 2007? No! Why participate in a bidding war.
3. The best deals in today's market are pre-foreclosures. Pre-foreclosure commercial properties are the best deal in town because negotiations and response times are usually very prompt, contracts are usually very simple, information on the property is usually more accurate and plentiful. Banks have more holding power and more time to sit on non-performing properties, investors do not, which results in better value for a buyer.
4. Pay in cash. If you want to be taken seriously, you have to pay with 100% cash, at the close of escrow. Loans are available but usually a hindrance when buying distressed commercial properties. If possible, pay cash and then refinance later if you need your cash.
5. Make an offer. If you want to get a deal on a property you need to make an offer on a property at a deal price. Do not be afraid to send an offer to a seller that is more realistic than their asking price. Do you think the Seller will drop the price if you do not ask for the price to be dropped?
By: Brandon Koplin - Senior Sales/Leasing Advisor Strategic Commercial Realty bkoplin@scraz.com 602 343 2929.
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Top 5 Things to Know When Shopping for Commercial Foreclosure Properties
Posted by Brandon Koplin in Commercial Foreclosure Information, Top 5 Things to Know When Shopping for Commercial Foreclosure Properties1. Just because a property is bank owned or real estate owned (R.E.O.), foreclosed, distressed, or short sold does not mean that it is a good deal. When shopping for commercial foreclosures one needs to be aware of what a good deal is, and that usually means knowing the prevailing rental rates, and comparables.
2. Never buy at an auction unless you are the only person bidding. What is this 2007? No! Why participate in a bidding war.
3. The best deals in today's market are pre-foreclosures. Pre-foreclosure commercial properties are the best deal in town because negotiations and response times are usually very prompt, contracts are usually very simple, information on the property is usually more accurate and plentiful. Banks have more holding power and more time to sit on non-performing properties, investors do not, which results in better value for a buyer.
4. Pay in cash. If you want to be taken seriously, you have to pay with 100% cash, at the close of escrow. Loans are available but usually a hindrance when buying distressed commercial properties. If possible, pay cash and then refinance later if you need your cash.
5. Make an offer. If you want to get a deal on a property you need to make an offer on a property at a deal price. Do not be afraid to send an offer to a seller that is more realistic than their asking price. Do you think the Seller will drop the price if you do not ask for the price to be dropped?
By: Brandon Koplin - Senior Sales/Leasing Advisor Strategic Commercial Realty bkoplin@scraz.com 602 343 2929.
