Should I enter contract without Appraiser/inspector with current situation?
Hi guys, I am buying a commercial property in small town without any comparable available to me. 
So the 30,000 sqft building is asking for 625k.
I offered $450,000 on it.
Then the listing agent kind of ghosted me for a month (but email and text me every other week to apologize saying he will work on it)

Today, he finally got back to me and counter-offered at 585,000 with 25,000 earnest money. $10,000 of which would be non-refundable after January 5th, 2022.

So I’m not sure if I should enter any agreement before having an appraiser telling me the market price and I don’t even know what’s the property tax yet(split partition deed) according to seller.

What should I do at this point?
Any advise is appreciated.
[{"id": "hozhla0", "text": "In a market where there are no comps the building is only worth someone is willing to pay for jt. I would assume an appraiser isn't going to blow up a deal like that so it will most likely appraise at purchase price assuming it's not totally crazy. I would determine what price you are comfortable at and counter back with that.", "replies": [{"id": "hozwv9c", "text": "That they will be able to provide some comparable sold in the past in similar towns? so I have a clue that I\u2019m not overpaying right?", "replies": [{"id": "hozy8p6", "text": "Your missing the point, if there are no true comps in the area it doesn't matter. The property is worth what someone will pay for it. If you are willing to pay $450k but someone else is willing to pay $700k because it's more valuable to them then that is the highest and best use and that is what the property will appraise for. Assuming it's an arms length transaction and again it's not aggregous.", "replies": [{"id": "hp01o3u", "text": "I see your point, basically I\u2019m not feeling confident and afraid I might overpaying for it. \nBut thank you for your honest advise buddyz", "replies": [{"id": "hp02j9k", "text": "Yep, then maybe wait out the market and see if it gets any bites. It could sit for a while then the market says it's worth less. You risk losing it but doesn't sounds like that's the end of the world for you anyway.", "replies": [], "depth": 5}], "depth": 4}, {"id": "hp1rt7s", "text": "Not trying to call you out or anything but highest and best use is not solely about the price paid for a building/lot, it's more about what use in that particular location would garner the highest NOI and thus value. Someone can pay more for a lot with an inferior use but that doesn't mean that particular use is the highest and best use. \n\nI do agree that certain locations just don't have good comps and as an investor or owner/user, you have to pay what you feel comfortable with paying or don't. And even with comps, market value, assuming an arms length transaction, is really whatever someone is willing to pay.", "replies": [{"id": "hp1tf4f", "text": "Yep, I don't disagree with you. Appraisals are more of an art mixed with science so its tough especially when their are no comps. It really depends on the market, it seems that in this case though the property will be worth what someone pays since there is a limited market for it. You can look at income approaches versus sales versus replacement value but usually warehouse space trades on sales value as it's typically worth more to an owner operator than an income investor. Again without knowing the market dynamics its tough but if he is concerned about over paying it really comes down to the value that the property bring to him.", "replies": [{"id": "hp1uq02", "text": "Completely agree.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hozhxb1", "text": "What do you mean no comps? Can you even determine a what cap rate the property should trade at based on the asset class and market area?", "replies": [{"id": "hozw9ya", "text": "Hard to determine Cap rate when I have nothing similar for lease/sale in 200miles. It\u2019s a small town. I\u2019m not that experience in commercial property.", "replies": [{"id": "hp0bqcq", "text": "What's your plan with the building ?", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hozk5c4", "text": "Definitely don\u2019t let anything become non refundable until you have a complete understanding of the property and are willing to commit to closing", "replies": [{"id": "hozwm21", "text": "Thanks for saying that, makes me more comfortable.", "replies": [], "depth": 2}, {"id": "hp0arp7", "text": "Holiday's are here. You aren't going to get any reasonable cost turn times or even any quotes deliverable before it is non refundable.\nYou just spent a month letting the broker try to get offers to negotiate against your offer.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hozkjtz", "text": "Hire a broker.", "replies": [], "depth": 1}, {"id": "hozqm8j", "text": "Is this an all cash transaction or is there a lender involved? If there's a lender is unlikely you could waive the appraisal or inspection and it is likely that the transaction would also require a phase I environmental report on commercial real estate. Why not back it up a step and start with a Letter Of Intent (LOI0 prior to a formal offer so you both have the terms straightened out before you do the contract paperwork. I do not see any reason to have any conditions on your earnest money. Trying to find people to do inspections and appraisals over the holidays is never easy, why add to the pressure by making $10,000 non-refundable?  Do you have a buyer's agent or are you representing yourself? Unless you are pretty experienced, and have done this many times before, a buyer's agent is worthwhile to protect your own interests.", "replies": [{"id": "hozutfg", "text": "Got it. Im new to this town. I guess I\u2019ll hire a local agent to make my life easier.", "replies": [], "depth": 2}, {"id": "hozvml0", "text": "This is a all cash deal, and I don\u2019t have a buyer agent. I do have some experience with residential property but I guess commercial is completely different.", "replies": [{"id": "hp0tdg5", "text": "Yup. Very different. Look for a broker with significant experience in the type of commercial asset you're trying to purchase. Considering you have no experience, you need a little balance.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hoztgqj", "text": "1.) the appraiser shouldn't be telling you the market price, on an acquisition they just match the offer price the majority of the time. Do a DCF or at the very least cap the current income to come up with what you think value is. \n\n2.) any contingencies on your go hard money (dd, financing, etc)? Which would let you get out before the 5th. \n\n3.) Given your initial post, you don't sound super experienced on closing commercial RE. This is the most difficult time of the year to get third parties done (title, zoning, survey, physical, environmental, etc) because people are out for the holidays/lots of deals are trying to get done before year end. Given where you are on this deal, the 5th isn't enough time for you to get through all your DD. I wouldn't go hard without having the ability to prove all these out. \n\n4.) Why are you trying to buy in a market with no comps out of curiosity? How are you planning to exit if no one is buying but you? should be a wider cap rate given the illiquidity of the real estate", "replies": [{"id": "hp00zjn", "text": "1. The property is currently vacant, previous owned by big retail chain store.\n\n2. No contingencies, we initially prepared the money to purchase another 5000sqft storefront in same town asking for 530,000.\n\n3. I have no experience in commercial, but I do have some experience in residential properties.\n\n4. To be honest with you, I have no exit strategy on this one. Our family own a few small retail business, and this particular town have done outstanding in sales, much better than any other store, so we are trying to expand in this town. \nIt seems like a dying town in the middle of nowhere with tiny population, but it is the most diversified town I\u2019ve seen and is continue growing in immigrant(illegal immigrants)\n\nThanks for the advise buddy.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hp02d47", "text": "No worries bud. I\u2019m just asking these questions to help out. Your probably coming from a bit of a different perspective as an owner user. But I would use this to try and negotiate the price down- your probably the only one bidding and you should try the best price as possible. \n\n1.) if it\u2019s vacant I would try and get a land value or a dark value (how much it would cost in Improvements/commissions to get a tenant in vs the amount the tenant would pay in rent). \n\n2.) so you do have another comp- did that sell? At what price/cap rate/price PSF?\n\n4) can\u2019t speak to. If there are other factors other than the RE at play. I\u2019m just telling you how a RE fund would look at this. But sounds like it might be a good business choice, which is an entire different discussion.", "replies": [{"id": "hp05x5o", "text": "The comp I mentioned was a closed restaurant business space, and it is not selling. I know another 5000 sqft restaurant space(owner still operating)trying to sell 500k for almost 5 years and it\u2019s still there. And a 1 million nail spa space for 900k. Basically this town haven\u2019t sell any commercial property for the past few years. So I don\u2019t know how to use these as comp for the 30,000 sqft giant retail space.", "replies": [{"id": "hp07s47", "text": "So both of those spaces have way more potential users (think about how many people can afford that space vs 30k)- plus No exit is also huge. Nothing Sold for 5 years is a huge red flag. I wouldn\u2019t own in this town- why can\u2019t you rent instead? If for some reason you really want to buy, I would try to approach the town about getting your RE taxes abated for x number of years and a big price reduction. your buying property and bringing in business which will help increase sales and payroll taxes vs it being empty building", "replies": [{"id": "hp0aji9", "text": "It\u2019s funny that the town does not have any retail space for lease. It\u2019s a very unique small town.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hp09erd", "text": "If you want to back door pricing I suggest calling the county and asking them if they\u2019ve done a tax assessment recently if so see what they appraised the building/ property for and add roughly 3-6 percent on top of that. There\u2019s also usually a direct commercial person to speak with. However considering it\u2019s a small town they may be backed up. So then you could get on Zillow, look up the subject property click on the map associated with the property and view the lot lines. You\u2019ll be able to see parcels near by and what they sold for. Commericial isn\u2019t much different from residential be confident. The only difference is use of space and sqft usually. Also the non refundable is a no go I would not agree to those terms before official appraisal! Also you\u2019re paying with CASH! You\u2019re in control, especially if the markets slow. Depending on your expected return I wouldn\u2019t go higher than 500,000. A 30,000 sqft building for that price is a steal. You could just invite Amazon or some big box retailer to lease the space down the road and relocate your own operations lol! Best of luck whatever the outcome!", "replies": [], "depth": 1}, {"id": "hp1ewbd", "text": "Ignore the comments here trying to find some market value.  They are asking $20/SF.  You offered $15/SF.  No broker/appraiser/assessor is going to have any data that will give you comfort either number is more accurate.  Market data in tertiary markets is scarce and never directly comparable.", "replies": [], "depth": 1}, {"id": "hp2hj56", "text": "30 days due diligence period is standard (refundable earnest money).", "replies": [], "depth": 1}, {"id": "hp35xeg", "text": "\"What should I do at this point?\"\n\nEmail him every other week saying *\"I'll work on this\"*", "replies": [], "depth": 1}, {"id": "hp3ruoa", "text": "Counter them with terms you want for due diligence, that allow for the time you need to get an appraisal and other things checked out before any of your money goes hard.", "replies": [], "depth": 1}]