If you are selling a piece of commercial real estate in Orange County, and it is conveniently located and available for a reasonable price, you are likely to receive hundreds of offers. Orange County is experiencing a massive boom, with lots of activity and strong economic growth. In fact, the Los Angeles-Orange County economy hit $1 trillion in 2016.
The federal government’s recently released annual accounting of business output of U.S. metro areas shows the L.A.-O.C. region’s gross domestic product — a broad measure of the value of all business done in a geographic region — rose by $38 billion last year to $1.002 trillion.
The problem with this, however, is that among those multiple offers will be quite a few that aren’t genuine. Not just that but spotting the best offer in the sea of various options can be quite difficult in and of itself. So, what are some of the things in particular that you should look for? Interestingly, it is mostly about human behavior.
How Your Buyer Behaves and Acts
First of all, you need to understand buyer behavior. The way they act when they start negotiating is telling in terms of how they will act once the deal has been struck. Interestingly, there has been a drive as of late to better understand the psychology behind commercial real estate purchases and how to use this to your advantage.
The study of real estate would benefit from an expansion to include consumer behavior concepts from sociology and psychology as synthesized through marketing. Inclusion of these concepts in real estate education will help real estate analysts better explain and predict the behavior of decision-makers in real estate markets.
One of the things to look for in terms of behavior is how quickly they respond to counter proposals and requests for further information. If they are truly motivated, then they will be quick to respond. Effectively, what you should look for is motivation, as this is the best indicator of your buyer being serious with the intention to buy.
Arriving on Time
Timeliness is also an important factor. Everybody knows that the market is tight right now, particularly for office space in Orange County. The expression “you snooze you lose” is highly applicable here. A buyer who does not make the effort to arrive on time for appointments and viewings clearly isn’t all that interested.
What Is Their Story?
You should also consider why your buyer is interested in your property. Perhaps the buyer is the business next door, and they want to grow. You have to ask yourself whether their projected growth is realistic. After all, they have to be able to finance the offer they have made to you. Similarly, should you wish to lease your property, you have to make sure that they will be able to pay the rent.
How Has the Buyer Prepared?
Take a look at your buyer’s behavior irrespective of yours. A very serious buyer, for example, will have lots of inquiries. They may want to see the property several times. They will also make goodwill gestures, such as providing you with a pre-qualification letter.
Prequalification and preapproval both refer to a letter from a lender that specifies how much the lender is willing to lend to you, up to a certain amount and based on certain assumptions.
Why Is the Buyer Particularly Interested in Your Property?
There is a reason why the buyer is considering your property and not any of the others, if they are serious. Perhaps you have more land area, a bigger warehouse, more amenities, or a bigger parking lot. A serious buyer is likely to be interested in a specific aspect of your property.