Get Initial Asking Terms in Writing
If a landlord or leasing agent simply tells you the terms, ask for something showing the terms in writing before you submit a counter offer. If they are reluctant to offer a letter, ask for an email or a copy of the listing for the space (which will contain at least the basic leasing information).
Why is it so important to have initial terms in writing? A leasing agent acts on behalf of the interests of the landlord. If an agent either misunderstood, or attempted in any way to alter the landlord’s directions, having terms in writing can show you a landlord that your counter offer was made in good faith based on information from the leasing agent.
It is also possible that you could misunderstand lease terms if they are not in writing. This could lead you to counter too high or too low based on information you misunderstood.
Another reason to have the terms in writing is that it allows you time to research more about the lease, to ask an attorney about the terms, or even to compare terms to any other leases you are considering.
Asking for terms in writing is not in any way a legal commitment on your part to move forward. You always have the option of countering the terms or simply turning them down outright.
What is a Counter Offer?
When you buy a house, you negotiate the price. A seller lists the house for the amount of money they would like get from the sale, but almost always expects to get less. A buyer interested in purchasing a home will submit something in writing to the seller with a counter offer. In this case, a counter offer is an offer to buy the home at a lower price than what the seller is asking. Simply stated, a counter offer is bargaining.
This is also true for commercial leasing. While some leases may truly be non-negotiable, for the most part, it works just like buying a home: a landlord or listing agent asks for one rent price (or set of terms) but allows some room for negotiation. In other words, in commercial real estate, it is almost always expected that the renter (or, lessee) will submit a counter offer, so the landlord inflates the prices and/or terms.
The Initial Negotiation Process
Once you have expressed interest in leasing a space, some landlords will simply offer you a form that states the lease’s asking terms. These forms may have a response section or an attachment to complete where you can counter offer. Others may just offer a copy of the listing papers (an ad or flyer) with “asking terms.”
In most cases, however, it is in your best interest to submit a letter or other written form of communication with a counter offer. Why? Because in a letter you can include selling points as to why you would make an ideal tenant, tell the landlord about your business, and make the deal more personal. For a hot property with multiple interested parties, your letter can serve as a sales ploy to get the landlord to pick you, and agree with your terms.
Negotiation may go back and forth, so be patient. A listing agent usually has some freedom to make decisions, but most likely will need to confer with the landlord. This can take time.
If you have not heard back on an offer in one to two business days, it is fine to follow up. But try not to appear desperate or overly anxious as this could affect the outcome of your negotiations. Remember, most listing agent want to move a property just as fast as s/he can so they usually do not need much “nagging.”
