Monday 8 August 2016

Important terms for CRE Brokers

However there is a large glossary including all the technical real estate terms and compressing it for just the ones used for commercial property isn’t at all helpful, there are some specific terms that a CRE Broker must know to provide better service to his clients:



·         Common Area Maintenance:There are some areas in the property liable for maintenance to both the owner as well as the tenant. The maintenance charge of these areas is to be borne by both the parties. This is known as the common area maintenance. And Broker needs to negotiate this for either of them.
·         Capitalization rate:Commercial properties are all about profits and returns. To ensure that, the broker needs to know the value of a property as calculated by what is known as the capitalization rate.
·         Escalation Clause:This is again a term broker needs to know about. As per this clause, the buyer needs to make an offer better than the already highest bidder but still lower than the escalation cap. This clause is kept in the contract to maintain the value of the house even after a long term contract.

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