Do you have commercial property in Barrington IL to sell, or are you looking for a commercial property to buy? Are you looking for a commercial Realtor to help you? Are you ready for an intelligent and frank conversation about your options?
Before proceeding to buy or sell commercial real estate you should interview several real estate brokers to find one that’s best for you and your circumstances. While we are primarily residential, for the commercial side my skill sets are price assessment and internet marketing and I serve primarily retail and office property sales, not leases.
We’ve made it easy for you to jump forward to any section by using the links in the table below.
Establishing The Professionalism of a Commercial Realtor
Jump Forward To:
- Establishing The Professionalism of a Commercial Realtor
- Pricing Commercial Properties
- Marketing Commercial Property in Barrington
- Barrington Commercial Brokers
There are Realtors that serve commercial clients only, others that serve residential only and others that do both. Neither one nor the other is necessarily right or wrong. I serve both but both of my practices are limited to the clients I feel I can serve best.
Also note I am the managing Broker of the company and therefore hold the highest license possible to sell all real estate in Illinois, residential and commercial.
I am a member of the Northern Illinois Commercial Association Realtors which gives me access to the Illinois Commercial Exchange website of commercial real estate listings for Northern Illinois, quite an expansive area. As a member of North Shore Barrington Association Realtors, Illinois Association Realtors and National Association Realtors I am a member of MRED our local Multiple Listing Service and my commercial listings get exposed on this MLS too. This is something many commercial Realtors do not have for two reasons:
- They don’t want to share their listings.
- They don’t want the annual expense.
Let’s look at both these issues from a client’s perspective.
Barrington Commercial Brokers Not Sharing their Listings.
It’s a long standing way of doing business in the commercial world, I have experienced it many times. The listing broker wants to be the selling broker too. That means they make twice as much money. It also means they are working both sides of the deal and representing both buyer and seller. I’ll talk about dual agency next but this way of doing business is not in the best interests of the client, at least I do not believe so.
So you list for sale, you rely now on a sign in the ground to attract a buyer and your listing agent to market the property to attract the best buyer for your property. Your listing agent may add your property to some only commercial listing databases but these are not shared with other Realtors. Your property is not added to the MLS, my guess is about 90% of the time you’re missing out on this vital marketing piece of the equation. Many of us have commercial buyers and if your property is not on the MLS, we may not even know it’s for sale.
People often consider the MLS is just for residential. Here’s some quick numbers for the last 12 months. The MLS reported 2202 commercial properties sold through the MLS. There are 73818 active commercial properties listed with commercial real estate brokers. Is this an advertising venue you really want to miss out on?
It’s a well reported fact that most buyers come from other Realtors. Just last week I was approached about a property for sale and it was in our MLS. Therefore I can help the buyer knowing I am going to be paid for bringing this buyer in, that’s how our MLS works. (We agree to share our commissions to attract buyers and their Realtors.)
The Annual Expense of MLS Membership
Yes it’s a business expense that nearly all residential brokers pay. So why do commercial brokers not pay to play? I am not sure because it’s a place your commercial property absolutely should be marketed in. Perhaps the brokers do not want to be Realtors, i.e. members of the National Association Realtors. Perhaps it’s simply money. Regardless of why in my opinion it’s a great disservice to commercial property owners! Other brokers have clients that may buy your property. Let’s attract them by agreeing to share the commission with them.
Dual Agency Sucks
I promised to talk about dual agency. This is where your listing commercial broker, the one who is working for you, also works for the buyer. Yes it is legal in Illinois.
How would you feel if you were in court and your attorney now went to the other side and represented the opposition. The reality is it cannot be done. In real estate it is the same. Parts of your representation are lost, the biggest part being the $$. Your commercial broker now cannot help the buyer come up with an offer amount, and neither can he help you decide if the amount is good, bad, ugly and what you should do about it. You are on your own!
This is the fastest way to lose potential $$. Buyers will low ball you and you’ve got no guidance now on what to do.
Skills and membership summary: Look for a broker that offers you more than a sign in the ground, one that invests in their business, they are likely more successful and more committed to you.
Pricing Commercial Properties
How are you going to decide on an asking price or if buying an offer price? Commercial real estate is no different to residential, we look for comparable properties. Easier said than done though when the commercial market is not rocking and rolling and nothing is ever the same as another property. So how do you establish a price?
- Get together with your advisors and establish a price you think is right.
- Find a Realtor that can look at sales and give a range of pricing, low to high.
- Ask your Realtor to complete an APOD. Annual Property Data Sheet to establish your CAP rate.
Actually not one of these but all of them. Investors buying will want to know the CAP rate. That’s their rate of return if they then lease the property out. Sales and active listings that are in your area, have similarities to provide a benchmark for the high and low pricing. Remember sales provide real data, active listings not sold are your competition. Your properties will be different, undoubtedly so. But some data analysis by your Realtor can break it down and come up with square footage numbers. (If they know how and bother to do it.) The last thing you ever want to be is the highest asking! There’s only one thing that follows that….disappointment!
This is another reason your commercial broker should be a member of the MLS, this data is freely available to us. Non members don’t get it, period.
When asked to consider a commercial listing to represent for sale, as a commercial broker I refresh my memory of the very long appraisals that commercial properties are subject to, then spend 2 or more days researching data to provide me with that low and high pricing range. This includes properties sold and the current listings, examples from our MLS in Barrington shown here.
Pricing Is The Second Thing I Discuss With Commercial Seller Clients
In any meeting I have with a commercial property owner, pricing is always the second thing we discuss, after my introduction. The reason is simply this. I will not represent a client with an unrealistic asking price. I don’t want my name associated with failure. My goal is to sell a property and all the effort in the world cannot ever sell an overpriced property.
I usually give clients an upper limit and advise that anything above that is when I walk out the door. I will have spent 2-5 days researching the numbers, I am confident in my pricing. I do this second, so I do not waste the client’s time or mine. I am brutally honest, my conversation is frank but informative and we either move forward to marketing or we part ways.
In real estate, pricing can be adjusted to compensate for just about any negative or positive factor any property has. An experienced Realtor cannot put an exact number on what a property will actually sell for, but should have the experience and knowledge to get a very close range. A property seller’s situation can affect a sales price, motivation or financial situation, desire to move on fast or patience to wait, all play into price.
Pricing To Your Buyer
A final consideration in pricing is consideration to the buyer. What is the property’s most likely buyer to be. What will they do with the property? Are they buying a business with the property and are they likely to maintain that business, expand the business and so on. There’s likely only going to be one buyer and projecting who he might be and what he might do, can help establish how to market a property, including your asking price, as well as how long you may wait for him to pop through your door and take a peak.
Marketing Commercial Property in Barrington
Residential real estate has fast moved into the world of the internet but commercial real estate is lagging behind, big time. Marketing by commercial real estate brokers aligns somewhat with the professionalism and membership with which a commercial broker is involved in. It seems so much still revolves around a listing broker attracting a buyer via a sign in the ground. Maybe advertising a property on Loopnet and maybe not. And that’s it. Yet so much more could be done.
Who Is Your Likely Buyer?
I mentioned this in the previous section. While we won’t ever know who he will be or what he’ll do with the property, there’s no reason not to come up with our own ideas and project those ideas in our marketing. Imagination is in short supply, so let’s throw some ideas out there.
- A complete change of business type. Location, property accommodation, features, benefits, size, type and zoning can quickly narrow this down to a few ideas.
- Maintain existing business assumes you are willing to sell your business with the property. If this is an option, let the buyers know. be prepared to let qualified buyers see your cash flow.
- Expand your business. Many businesses can be expanded by adding on. This does not mean you become a Walmart or lose your niche, it simply assesses what you offer and how it could be bettered for a future business owner. It can make a package of business and property seem more appealing with some ready thought out ideas to offer.
Advertise Where, What, How, Which?
Yes The MLS
I think by now you’ve got the drift. The MLS is not just for residential but is important for commercial properties too. Don’t miss out!
Alternative Listing Advertising
Whether it be the Illinois Commercial Exchange, Loopnet, CoStar, Catylist; these are all important commercial sources for buyers to look in. You’ll need to know the benefits of each are because none are multiple listing services. They are all advertising platforms and some are linked to others.
Signs – You Still Need Them
Still an important part of marketing because it helps identify the property potential buyers who drive by. There are still buyers that drive around looking for property.
Marketing should always include all or as much as possible of the following:
- Photographs, lots of photographs
- Video for use in all these advertising venues
- Property flyers with data
- Property data, measurements, lot survey if applicable, taxes
- Individual property websites
- National Realtor networking
- Individual property marketing
- Commercial broker website exposure, on a website that actually gets traffic!
- Social media exposure
- Search engine exposure and positioning to attract that targeted buyer
Many of these methods are not a set it and forget it method, they are constantly updated and changed to publish and re-work and re-publish.
If you want a more aggressive marketing package for your retail or office building in Barrington IL, I am happy to explain all the above once we get past that price conversation. Generally speaking most clients let me do my thing, knowing it’s much much more than other commercial brokers in Barrington.
Barrington Commercial Brokers
Factoid: Did you know one Commercial brokerage operating out of Barrington left the area and has since closed. I have it on good authority another is closing soon. Others left the area and now work in Chicago. Barrington Realty Company is not leaving, I am not leaving. Why not have a local commercial broker who understand Barrington?
What Are Commercial Brokers Paid For?
Our job is to represent you, our commercial property owner client. We do not practice dual agency, we only ever work one side of a deal. Should be attract a buyer we refer them to a colleague in another company to take care of that buyer. This makes for absolutely no conflict of interest at all, and you get the best representation possible.
Our job includes:
- Understanding the local commercial property market
- Understanding pricing and strategies to use
- Marketing, property exposure
- Communication throughout marketing and to closing sale
- Vetting buyers prior to showing property
- Attending showings with potential buyers and their brokers
- Follow up showings to gauge interest
- Negotiation strategies for making or receiving offers
- Vetting buyers prior to showings to cut down on time wasters
- Contract writing / negotiating / follow up
- Any assistance client needs throughout process
Unlike residential real estate, once a commercial property is under contract our involvement is very little. But that never means we are done. We are here for you and will continue marketing your property under your instructions until closing has happened. We can switch gears, targets and pricing as needed by staying informed about the current commercial real estate market in Barrington.
For assistance with your commercial real estate sales needs in Barrington, or any of the nearby communities, give Corinne a call at 847-363-3686.