How to negotiate the best price possible when buying or renting commercial property

Tips on how to strengthen, and understand the strength of your bargaining position

There is often a surprising amount of wiggle room in the price of a commercial property. In fact, a certain amount of negotiation is often expected, so it’s important to do some research to put yourself in the best possible negotiating position.

Whether you’re a buyer or a broker, buying as an investment or leasing a property for your business, there are various strategies you can employ to make the process work in your favour.

Prior research is essential

You must do your research before opening negotiations. Knowledge is power when it comes to negotiating, especially when leasing commercial premises.

What is the market rate for similar properties in your area? How long do commercial properties remain on the market on average?

If leasing, how many other properties does the landlord own, and are the rents comparable to those of the property you’re interested in? If buying, how many other buyers are you likely to be competing against for the same property?
Find the answers to these questions and you’ll gain insights into the strength of your bargaining position.

Let the seller name the price

A decent understanding of human psychology will help you during negotiations, as will a dose of common sense. It is often said that the first party to state a price loses – so never be the first to lay all your cards on the table.

Get your funding in place at an early stage so that when you do find the property of your dreams, you can reassure the seller that you have the means to buy, that you’re not a timewaster and that you are ready to set the process in motion.

If you are fortunate enough to be able to pay cash, you will be in a very strong position to negotiate the price upwards.

Due diligence and surveys: be thorough, efficient and available

A due diligence survey is essential, as is a full structural survey. Wait for the results of these to come back before opening price negotiations. The results could well strengthen your bargaining position.

Due diligence also needs to happen as soon as possible to avoid lengthy delays and to reduce the chances of being gazumped: being beaten to the property by a last-minute rival bid.

That’s why it’s always important to keep things moving. Don’t stall things unnecessarily.

Keep lines of communication with the buyer open at all times to keep the transaction on track. Be ready to answer the phone to reassure the seller if they have questions or misgivings.

Hire a negotiation expert

A commercial property broker will have the expertise and experience you probably lack to negotiate a favourable deal.

Buying or leasing a commercial property has many differences to transactions in the residential market and hiring an expert in modifying leases could save you a great deal of time and money.

Using a commercial agent also burnishes your credibility. It shows the seller that you’re serious – especially if you’re a minor player in the investment market.

Look for a local firm with knowledge of the area, although large agents might be suitable if you want to buy a chain of units across the country.

A commercial property broker will, of course, charge fees and/or commission, but the input of an experienced professional is invaluable. Economising in this area is inadvisable.

David Pottingham

About the author

David is a guest author for and


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