I saw a property over the weekend that I am very interested in. Is it necessary to do an LOI or should I just go directly to my attorney to draw up an offer? It is recommended to seek legal advice before you send an offer, correct?
You can get a commercial contract from a local Realtor or commercial real estate broker. They are pretty much fill in the blank forms. Every LOI I have ever done the owner said fine but where is the contract. It is a way to get the ball rolling but weak as they are usually not binding on either party. If you have problems understanding the contract I use use an attorney to help you. A lot of higher end buyers just have their attorneys do the contracts but with their budgets it is only a small portion of their costs to do business and they spend their time doing more deals or other more important tasks.
So basically an LOI is pointless. If you want the propery there is no reason to do an LOI, just make a purchase offer in writting? With this offer, should I give an earnest money deposit and make it contengent on certain specifics?
Commercial deals usually have an inspection period where you can walk away for any reason and get the EM refunded to you and are also usually subject to getting financing. All commercial deals I have done the EM is not due until the contract is accepted and in fact the contracts in Texas give the buyer 3 days to deepposit the money with the title company.
I do not use LOI any more. Most of the letters I used in the past the response was put it in a contract and we will look at it.
Actually, I don’t have an agent. Is it possible to have the seller’s agent represent me in this deal or is that a conflict of interest? What would be your suggestion?
Originally, I didn’t feel the need for an agent for this deal since I found it on my own and analyzed everything but after speaking with a few seasoned investors, they always recommend have an agent in the deal and acting as a “buffer” between you and the seller. One even recommended going with the seller’s agent at this point, since my main objective is to get it off the market as soon as possible. Thought?
Yes you can have the sellers agent work for you. They can not be your buyers agent but can write up and present the offer for you. There are buyers agents out there that will try to get you a better deal perhaps by knowing information about the seller that the sellers agent is not allowed to disclose, such as the seller just turned down xxx amount or it was under contract at xx amount. You can still get a good deal on your own.
It is a good idea to have the buffer. Just recently I cursed out my agent because the buyer wanted to walk and this would have killed the deal if I has been in direct contact with the buyer.
Like anything there are good and bad brokers. The seller’s agent should be tickled pink to get both ends of this deal, and will likely do whatever is necessary to get it done. If you do not feel comfortable with that, check with a few comm. brokers in the area. Where are you? Fort Wayne?