Considering a Real Estate Purchase? Talk to Your Banker First

By Barbara Hunter
Senior Vice President, Regents Bank

Your banker is more than a resource for loans and deposits – a  savvy banker should be well positioned to be one of your top business advisors and a resource for your financial success. As a business owner or manager, you try to hire the best people to help grow and support your business. Why not apply this same high standard when you select a business bank and banker?

Consider the difficult decision to purchase a property. In the early stages of this decision, you might consult with your CPA, attorney and commercial real estate broker, but what about your banker? With the right banking relationship, your banker will be another valuable advisor to help you find the best solution.

Investing in commercial property has a number of benefits, including sublease/rental income, appreciation and tax advantages, but, of course, a number of pitfalls as well. Maintenance and improvement costs can be significant and recent investors have found the decrease in property values an unwelcomed surprise.

Before you apply for a loan, talking to the right banker can help you assess the properties and consider key aspects a bank will use when deciding whether to lend on the project. Your banker can also review your company’s financials to help you understand how much you are eligible to borrow and how much you should prudently invest.

When considering a real estate purchase, you should be able to rely on your banker to provide valuable insight in key areas, including:

• Illumination of hidden issues and business realities impacting your decision

• An independent perspective about the property(ies) you’re considering, which may include market analysis customized to your company’s financials and property requirements

• Education about tax benefits or credits that may result from your purchase

In today’s market, real estate purchases are scrutinized more than ever, both by the buyer and the financier. Careful planning and assembling the right team are key components toward paving the way for a smooth transaction and a wise business decision. Ask your business associates for referrals and consider the location of the bank to your business.  Don’t settle for an impersonal banking relationship when you have so much to gain by spending the time to find a banker who can serve as a valued business partner.