Selling commercial real estate by owner can be a stressful, yet rewarding experience.
Commercial real estate sales require a little more finesse and experience than residential.
The best way for you to sell a commercial property depends on your situation, but there are some rules of thumb that can help guide you.
Why sell at all?
There are usually multiple reasons why someone would want to list their commercial property for sale. Most real estate transactions involve selling the property for its current value, which may be more or less than the original purchase price.
Whatever the reason, selling your property depends on finding its “Why.”
Some common reasons for selling include:
- To cash out equity
- You don’t want or need it anymore
- It’s costing you money
Understanding why you want to sell makes it much easier to ensure that you get the returns you’re looking for.
How to Properly Value Your Property
To sell the commercial property, the first thing you need to do is determine its value.
There are several ways to value your property. Here are some examples.
Strategy 1: Find a broker
A commercial real estate agent specializes in selling commercial properties for profit. Commercial brokers are like realtors, but they focus on commercial properties.
What makes brokers different from other CRE agents?
Brokers are different from other CRE agents because they’re qualified to own their own real estate companies.
Agents who represent themselves as individuals are only qualified to sell or buy properties as individuals, not as companies.
Why would you want to use a broker?
Selling commercial real estate by owner means working with a broker who has access to a large pool of resources.
Real estate brokers usually have an entire realty company behind them, meaning they have more people and resources at their disposal, and greater leverage when negotiating contracts.
How Do You Know if the Broker is Right for you?
You need to take a close look at their history and track record, their reputation, and whether there might be any legal issues involved. Also, ask former clients about their experiences with the broker’s firm.
This should give you an idea of how the work was completed and whether the broker’s client’s enjoyed the experience of working together.
Strategy 2: Find cash property buyers
One way to buy real estate without having to pay brokers’ fees is by finding cash buyers. They are uniquely attuned to the market, make offers fast, and are usually close to what properties are likely to sell for.
Advantages of Selling to Cash Buyers
- Getting lots of interest and responses quickly.
- The ability to sell products quickly because there is no financing involved.
- Finding deals on properties that need repairs.
Cons of Selling to Cash Buyers
- Offers are usually lower than what buyers who finance their purchases would be willing to pay for them.
- Cash buyers are likely interested in completing the sale quickly and aren’t interested in negotiating.
You need to weigh the benefits against the problems in each situation before deciding whether to sell to a cash buyer.
Finally, make sure all your documentation is up to date.
Before selling your commercial property, be sure all of its documentation is complete and accurate.
When documents are signed and sent, that’s it. You can’t change the terms of a contract once it has been signed.