Investing in commercial real estate requires a lot of work as it is a substantial financial investment. It requires systematic planning and careful research and analysis.
Selling commercial real estate also requires effort, strategy, and thought. Did you know that the value put in place for United States commercial construction is almost 90 billion dollars?
Not everyone is looking to spend millions on a new building. So when you’re looking to sell a commercial property, you’ll need to do things like assessing your pool of buyers.
If you don’t do it right, selling commercial real estate can be difficult. Keep reading to learn what mistakes to avoid so that your sale is as simple as can be.
Don’t Set Your Price Too High
Before you set an asking price, make sure you assess the value of your property. Conduct an evaluation of your business that is both professional and accurate.
Get a third-party to do the evaluation so that any unwarranted confidence or inaccurate projections don’t make their way into the listing price.
People will deem you as fair and trustworthy if your asking price isn’t too high. Plus, you’ll ensure a smoother and faster sale.
If you have to lower your listing price, or if your business stays listed for too long, it will turn potential buyers away by causing them to wonder if there’s something wrong with the property.
The goal is to price is as high as you can without turning off buyers.
Don’t Under Prepare
If you’re wondering how to sell a commercial property, don’t list your business before it’s ready.
One of the most common mistakes business owners make when selling their company is failing to prepare.
Take a long, hard look at your business, and determine what all the issues are. Do you have any staffing issues? Are there crucial or financial aspects of your business that need to be shared?
Make sure you have proper documentation to show why and how your business is sustainable or environmentally-friendly, for example. Have your lawyer look over the lease and identify any potential issues.
If there’s anything you can fix before you list it, do it, especially if it will warrant a better asking price.
Pre-Qualify Your Buyers
A lot of sellers don’t want to pre-qualify buyers because they fear the possibility of the buyer backing out. But it’s actually an integral part of the selling process.
Pre-qualification not only protects the seller’s confidential information, but it also ensures that only genuine buyers are privy to that information.
Before you qualify a prospective buyer, check all pre-qualification documents like confidentiality agreements and financial background information.
Craft a Good “Property Story”
Before you begin reaching out to potential buyers, make sure you know exactly what you’re going to say.
People want to hear a story and a good one at that. What’s the history behind the building or property? Are there any value-add opportunities?
What else does the business have to offer? What about the staff (if there is one)?
It’s important to know and understand your buyers, so you know how to communicate with them and appeal to their requirements and interests.
Hire a Professional
As a business owner, you’re inevitably busy, especially if you’re about to sell your business and move on to the next venture.
Hire someone to help with your sale who knows high-value commercial real estate in and out. A local expert will be able to help you find buyers, and those they have worked with before.
Disclose Any Defaults
Is there a piece of equipment that you KNOW will have to be replaced in the near future?
Do you have any staffing issues?
Are there any tenant defaults? If someone is behind or late or causing any other issue, it’s better to be upfront about it.
Is there a fire safety violation or anything else that could be disclosed? If there is, it’s better to be honest and open from the start.
Many buyers do their due diligence. Nothing’s worse than a buyer finding out something before you got a chance to tell them yourself.
Don’t Wait for Buyers to Come to You
Sellers in the commercial real estate industry expect to be able to post a listing, and then wait for buyers to come to them.
But buyers are overwhelmed, and they’re presented with tons of details and options every day. Plus, they’re busy, running any and all other businesses they own or invest in.
Sellers and their brokers must be in the know and be aware of any likely or potential buyers. After that, get their contact information and contact them directly, with your presentation and or property story in place.
As a seller, your goal should be to find at least two qualified buyers who end up competing against one another for your property.
Selling Commercial Real Estate Can Be Simple
Selling commercial real estate can be hard, but it doesn’t have to be. As long as you prepare accordingly and remember things like not setting your listing price too high, you should be able to sell with success.
It’s important to know who your potential buyers are and to reach out to them, without waiting around for them to come to you.
When you do communicate with those buyers, know what you’re going to say and what story you’re going to tell. Be honest about your commercial property by disclosing any current defaults.
Hire a broker who is familiar with high-value commercial sales and is local to the area in which you’re trying to sell.
Are you looking to sell your commercial property? Request a free consultation.
An Expert Commercial Real Estate Broker In An Outstanding Brokerage AgencyI’m Jeremy Cyrier, CCIM and since 2001, I’ve negotiated the successful sale of more than 1,000 properties for my clients, which makes my team one of the most successful selling commercial real estate brokerages in Massachusetts per the Boston Business Journal. Over that time, I’ve honed my skills to get my sellers the deal they want by marketing their properties as if they were my own. I know the local markets and what buyers want. That’s why over 81% of our business is repeat or referral clients.
Your commercial real estate is valuable not only to you as its current owner, but to the community, and to its next owner. My mission is to find the right buyer, who will pay the most, close on time, and keep issues in check to get the deal done, all while providing you with a smooth transition of ownership. My clients have gotten their agreed-upon sale price and on-time closings in 88.9% of cases.
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Schedule a free consultation with MANSARD’s team of experts to learn more. We’ll discuss real-time commercial real estate market opportunities and help you determine the best investment strategy for your portfolio.