As the market leader in Las Vegas Commercial Property Management and Brokerage, we are committed to not just meeting, but to surpassing the expectations of our clients. One of the contributing factors to that success is transparency.
We believe in being open and honest with our clients and will never play the stereotypical “broker game”—for example, telling you we have hidden buyers then having you drop the price later. To that end, we have compiled a list of our clients’ commonly asked questions and will publish the answers as a series of blogs.
In this blog, we will answer the commonly asked question: Once I Sign the Listing Agreement, What Happens Next?
Listing Agreement Implementation Schedule
After signing a listing agreement, sometimes clients can feel left in the dark about the progress of their listing. Here is our implementation schedule at MDL Group to give you insight into what is happening behind the scenes to get your property ready to market.
Phase 1: Pre-Marketing Launch Activities
The first phase is our internal prep period — or “quiet phase.” This is when we gather everything needed to create the marketing materials to promote the listing. These items could include drone photos, space videos, floor plans, power availability, excluded uses, parking ratios, zoning, etc. The idea is that we gather everything we need to show your property “in the best light” so it makes a good first impression when it “hits the market”. Once we gather everything we need, then our in-house marketing team creates the collateral we need to list your property. This could include signage, brochures, offering memorandums, email blasts, social media posts, and uploads to the various listing sites that we subscribe to.
Phase 2: Marketing Launch Activities
Once the pre-launch activities are complete, we prepare to “go live” with your listing. We believe it is important for your listing to be published all at the same time on the several commercial real estate sites that yield the most exposure. There are 4 major sites in our market and 5-6 ancillary sites. This coordination, along with push digital marketing called email blasts to the brokerage community and our proprietary database of potential buyers or tenants, provides the broadest market exposure. We enhance this outreach with social media posts.
Phase 3: Fielding Inquiries
There are multiple steps involved in fielding inquiries about your property and qualifying potential buyers/tenants. Inquiries come from several sources usually by phone, email, or our social media accounts. Text messages have become popular as well as of late. When fielding inquiries we answer a lot of questions and ask a lot of probing questions as well. We need to determine if the potential is real or not. We need to understand if the prospect is qualified to buy or lease your property… if they’re motivated… if they’re an appropriate fit with various factors like zoning, timing, financing, etc. After qualifying potential buyers and collecting information from them, we might enter into a Confidentiality Agreement in order to provide them the necessary information they need to evaluate your property. Throughout this phase, we continue to market the listing to prospective buyers/tenants and brokers.
Phase 4: Property Tours
Once we have vetted potential buyers/tenants, we can begin to show the property to those who qualify. We also conduct tours for brokers who wish to see the property prior to recommending it to their clients. Before the tours begin, we make sure the property is properly “staged” for the visitor. This includes arriving early to turn on all the lights, make sure the temperature is comfortable, and to clear away any debris or other eyesores. This sounds simple, but it’s vital!
During the touring phase, potential buyers/tenants may visit the property numerous times, or “retour”, in order to determine whether the property meets their needs.
Phase 5: Reviewing Offers, Escrow, and Closing
Sale Process:
Every offer received must be qualified to determine if the buyer has the financial assets and ability to close. The negotiation process includes the following:
- Negotiating the Letter of Intent (LOI). It is customary in our market to use an LOI until major deal terms have been agreed to.
- Drafting of a Purchase and Sale Agreement (PSA). It is usually up to the Seller to draft the PSA.
- Negotiating the PSA. Buyer and Seller should always engage legal counsel in this process. The Broker can give input but usually focuses on ensuring the deal terms in the PSA are what was agreed to and the attorneys focus on the legal language.
When there are several offers on a property, we will:
- Review all offers with you providing details and insight about each potential buyer.
- Develop a short list of the strongest candidates with the highest probability of closing.
- Reach out to the finalists to request “Highest and Best” offers. There are pros/cons to assess before deploying the highest and best approach as a tactic.
Once you select which buyer you prefer and a bid is accepted, an escrow account is opened. The escrow process involves the following:
- Opening of an escrow account
- Facilitating Due Diligence
- Securing financing
- Move to closing (a process to ensure that buyer and seller both receive what was agreed to)
- Scheduling the closing dinner!!!
Lease Process:
Every offer received must be qualified to determine if the tenant has the financial strength and ability to operate successfully in your property. The negotiation process includes the following:
- Negotiating the Letter of Intent (LOI). It is customary in our market to use an LOI until major deal terms have been agreed to.
- Drafting the Lease Agreement. It is usually up to the Landlord to draft the Lease.
- Negotiating the Lease. The Landlord and Tenant should always engage legal counsel in this process. The Broker can give input but usually focuses on ensuring the deal terms in the Lease are what was agreed to and the attorneys focus on the legal language.
There are three things that we need to ensure before a lease deal is “done,” and certainly before we can invoice for our compensation.
- Delivery of a fully executed agreement.
- Insurance Verification: The tenant needs to provide a Certificate of Insurance (COI) and add the landlord as an additional insured.
- Landlord receives “Funds to Occupy” aka “Security Deposit.” The Agent will continue to check in with the Landlord and Tenant until the business opens for business or starts paying rent.
As you can see, there are a multitude of tasks to be performed, documents to be completed and signed when implementing the sale or lease of your commercial property. Our experienced brokers are well-versed in all phases of the implementation and will work diligently to get your property sold or leased to your specifications.
For more answers to your commercial real estate questions, check back to the MDL Group Learning Center for the next blog in our series of “Answering Our Brokerage Clients’ Most Commonly Asked Questions” – How long will it take to sell my property?
