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Should you hire an agent?
I believe everyone, but especially people leasing for the first time, should use an agent. Here are a few of the reasons why. First, it usually won’t cost you anything out of pocket to have an agent. The way most leases happen is that the building owner will have a contract with an agent to lease a space. That agent will get a percentage of the value of the lease when a deal is completed. If another agent brings a client to lease the space, then the commission is split between the two brokers. The important thing is that the commission is paid by the building owner in the same amount whether you have an agent or not. That’s why I think it makes sense to have an agent representing your best interests, especially because it does not cost you anything. Second, agents have experience in negotiating and know current conditions in the market, they will be able to give you a good idea of what is fair or if something is off with a deal. They have the experience to ask questions about things that may not occur to you. Third, agents can make sure that all your bases are covered legally in case there is a problem down the road.
Finding a Space
Once you have decided to lease a space, your agent will need to qualify you. Typically, your agent will ask for 3 months of financial statements or a P&L with a copy of the corresponding bank statements. Next you will need to know your credit score(s). If the business is less than 3 years old in most cases there will need to be a guarantor on the lease, and their credit score will be used. If you have bad credit don’t fret, there may still be a deal to be negotiated. But, be prepared in cases of bad credit to have a bigger deposit. A bigger deposit can alleviate the risk for some landlords.
Next, your agent will discover more about your requirements. First, we need to know what kind of space you are looking for, Industrial, retail, specialty? We will also need to know what kind of business you are planning on running, some uses are not allowed in some spaces because of zoning, sometime a building owner will not allow certain uses on their property. For example, many building owners will not allow auto repair businesses, because the oil can create messes that are very expensive to clean. It is also helpful if you make a list of features that you need, and some features that you want. For example, you may need a space with a ground level roll up door and a heavy power supply. You may want to have two bathrooms, but you could get by with one. Your agent will also need to know where you would like to be geographically. For example, maybe you are looking for a space along Highway 50 between El Dorado Hills and Rancho Cordova. Your agent will also need to know an approximate size for the space you want, and what your budget is. Once your agent knows what you are looking for, we will be able to send you some options to choose from. When you find one you like, we will arrange a time to see the space in person.
Ryan Holmstrom
DRE#02098535
