Selling one’s real estate is hardly ever an easy decision to make. Once you are certain that this is the direction you want to take, the focus becomes finding a buyer quickly and getting the highest return.
While people do this successfully every other day, selling a commercial property is not without its challenges.
Here are four things to keep in mind when selling a commercial property.
There Will Be Legal Issues to Contend With
Just as is the case with selling a house, selling a commercial property involves many processes and paperwork.
At times, tax matters, joint ownership, and so on can further complicate the sale. Whenever you are selling a property, it helps to hire real estate lawyers to offer proper guidance.
You also need someone to draft contracts and ensure they are legally binding and that your interests during and after the sale are protected.
Look at Costs Comprehensively
Selling a property costs money. Often the more expensive a property is, the higher the associated costs will be.
Just like you would factor in expenses when running a business, you need to factor in selling costs when selling a property. This helps you compute the expected return more accurately,
Some of these costs will include:
- advertising costs
- legal fees
- realtor commissions and closing costs
- monies paid to banks for paying out loans early
Compute the Property’s Value
The only way to arrive at an asking price is by understanding what your property is worth. This helps you with more than just pricing. It also helps you arrive at the minimum amount you are willing to take.
There are several ways to do this.
The first is by looking at how properties comparable to yours and in your location are priced. This provides you with a ballpark figure.
The second is by having a valuation done. Professional valuers will assess your entire property, its condition, things that require replacement, and so on. They will use this information and other metrics to compute the property’s value.
Nobody wants to buy a dead investment. In commercial real estate, a good commercial property is one with active tenancy.
This assures them of continuous income. Essentially, an attractive building is one with an average of two-year lease terms.
When you are looking to sell, there are two ways to go about this. The first is to negotiate with tenants to extend their leasehold. The second is to establish their willingness to stay.
Some property investors like to do this themselves; some like to purchase a property with a guaranteed income.
These tips will help you gain clarity on the entire sale process. This will be useful in ensuring you sell in good time and walk away with a good return.