Thoughts on commercial property consultants?

[warp9]

Hi.
Our business lease expires in May 2011 and I am looking to buy freehold or long term leasehold (125 years) a property to put in my pension.

A friend of a friend is a commercial property consultant who I am considering getting to represent me. They are a good size, have been establised some years and have a good reputation. As I know nothing about buying commercial property I feel this would probably be prudent. They are looking to charge 1% of purchase price with minimum fee of £5K plus VAT. Max charge £1.5K if I decide to pull out.

Does this seem reasonable, any other thoughts?
Cheers
Warp

[davidjpowell]

1% is pretty much a standard fee for acquisition and disposal in the commercial world.

[Johnniem]

Depends on what you are looking to buy, where and how much. Happy to help if you are in the London area. pm me if you want to chat about it. Good luck, it seems that the 'arrers' are pointing upwards for commercial property but mostly in the big Cities.

[AB]

Echo the above. 1% is pretty standard.

Whereabouts in the country? As above, if local then my family business can help you out for nothing if not too time consuming.

[Chrisgr31]

1% is indeed pretty standard. Mind you it has always puzzled me becuase in theory the agents in not incenitivised to get the best deal as the lower the price agreed the lower his fee!

[singlecoil]

Chrisgr31 said:

1% is indeed pretty standard. Mind you it has always puzzled me becuase in theory the agents in not incenitivised to get the best deal as the lower the price agreed the lower his fee!

I find that very amusing too, and it's the reason I wouldn't agree to a deal like that.

[warp9]

Hi all, thanks for comments so far.

Chrisgr31 said:

1% is indeed pretty standard. Mind you it has always puzzled me becuase in theory the agents in not incenitivised to get the best deal as the lower the price agreed the lower his fee!

The company I'm looking to use as well as charging 1% also have a minimum fee of £5K which I suppose balances out that incentive. I suspect much of this business is recomendation, again a motivating factor.

I'm currently based in Edgbaston, Birmingham and ideally looking to stay in the same area. We currently occupy just over 3000 sq ft and am looking for premises around 5000 sq ft to give us some future flexibility.

[Chrisgr31]

singlecoil said:

Chrisgr31 said:

1% is indeed pretty standard. Mind you it has always puzzled me becuase in theory the agents in not incenitivised to get the best deal as the lower the price agreed the lower his fee!

I find that very amusing too, and it's the reason I wouldn't agree to a deal like that.

I recall some years ago seeking to agree with a client the fee for acquiring a leasehold warehouse for him. The industry standard fee basis is on a percentage of the rent agreed, but my client and I felt that this did not incentivise me so we looked at all manner of options of difference between rent quoted & rent agreed and a percentage of the value of incentives etc. Prpblem was this is also complex because if a standard rent free was 3 months at the time should we exclude 3 months from the fee calculation?

In the end we gave up and agreed we sort out the fee after the deal was done, which would go down well with the RICS. I left the firm though before the deal was agreed so no idea what happened on the fee!