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Are you ready for these hurdles in commercial real estate deals?

On Behalf of | Oct 7, 2020 | Commercial Real Estate, Firm News, Real Estate Transactions |

2020 is an interesting year for real estate deals. The real estate market is thriving, but the pandemic is causing some interesting and unexpected hurdles. The hurdles vary with the type of real estate transaction, but two specific problems to prepare for when dealing with a rental property deal in 2020 include a buyer’s unrealistic expectation of concessions from a seller and the shifting timetables that can accompany a volatile rental market.

Problem #1: Unrealistic concessions.

It is not uncommon to have certain concessions included before the real estate transaction is finished. In many cases, these concessions are reasonable, and a seller can accommodate the request. However, there are some recent examples of unrealistic requests.

A potential buyer for a rental property may request information about tenant rentals. However, during 2020 some concessions have become unmanageable. In this same scenario, there are instances when buyers have requested additional security deposits to better ensure renters will continue to pay rent. This is not a fair concession. A seller in this situation may need to reevaluate their negotiation strategy or look for another buyer.

Problem #2: A volatile market

Although the real estate market is doing well, the rental market is volatile. From residential to commercial, tenants are volatile. Businesses are struggling and renters are considering purchasing their own properties. Fluctuations in this market can result in a seller attempting to move the timetable up and complete the transaction before the buyer is ready.