Commercial short sales, which work in much the same way as foreclosures, used to be a fairly unattractive prospect. While you could pick up a property fairly cheap, you would often then have to find somebody to help you fix it up and turn it into a commercial premises that could actually be used, which pushed the cost up.
However, the current property market has created a climate whereby banks and lenders are much more willing to work with potential buyers in an effort to get non-performing loans off their books and back in the hands of people who will be able to start paying them again. As such, with the proper research you should be able to pick up the property at less than the asking price at a short sale, assuming you follow these tips.
Know The Property
Don’t go into a short sale with no idea about what the property you’re interested in is all about. In many cases the bank won’t want to tell you exactly how much a property is worth, so look into its history and work with a professional who is able to identify the positives and negatives before giving you a figure for what they think it should be sold for.
Keep this figure in mind when trying to purchase the property and use the results of your research as a bargaining tool. You will find that lenders are much more willing to sell quickly if you make a reasonable offer that takes the issues the property has into account, plus you don’t place yourself at risk of offering too much in the first instance.
Have The Budget
It is important to remember that the lender that is trying to sell the commercial property has already been burnt at least once before by a previous owner, so they will be looking for somebody who is able to demonstrate that they can back up what they say. As such, you should have more than enough money in your account to show that you will be able to handle initial costs and the loan repayments for a substantial period of time.
Print off bank statements and make sure that the right people see them. Furthermore, try to offer the largest initial sum that you can. This will help you stand out against other buyers who are interested in the property, in addition to increasing the confidence levels that a lender has in you.
Patience Is Key
Don’t get frustrated if your initial efforts end up fruitless. Some lenders may be a little stubborn and won’t be willing to let properties for a price that you deem fair, instead preferring to see if they can find a better offer. Don’t be suckered into making that better offer yourself.
Instead, simply wait and see what happens and always keep your budget in mind. In many cases you will find that nobody else has offered to purchase the property, which makes it much easier to negotiate prices once you show your interest the second time around.