Selling a commercial property is a big decision and sometimes a stressful one. It’s common for property owners to overlook details that are important to ensuring a smooth sale process.
However, overlooking these details can be detrimental when marketing the property, and ultimately hurt the sale potential of the building.
In this article, we will discuss several mistakes to avoid when selling commercial real estate.
1. Selling Without Real Estate Broker Representation
A seller working alone is limiting themselves to only their personal selling and marketing abilities. Although these abilities may be robust, working alongside an exclusive broker with strategic connections and market knowledge can widely expand the attention, and attraction to the property.
The platform of potential buyers ultimately grows so that the best price and terms can be secured.
2. Not Having Property Information Prepared or Organized
Being unprepared or disorganized can lead to confusion and delay the Broker’s ability to sell the property on the market. Having the necessary documents organized, enables the broker to faster, and more accurately, analyze the offering.
The documents that the seller should have prepared include:
- rent roll
- tenant leases
- real estate tax bills
- property income and expenses
- proof of property updates or renovations
- mortgage information
3. Lacking a Proper Exit Strategy
Sometimes sellers focus on listing and selling their property, but forget to consider what happens after the transaction is completed. It is very important for sellers, including all partners to know what they will do with the sale proceeds once the property sells.
It is important to plan for a 1031 exchange, Delaware Statutory Trust investment, or other financial strategies before listing the property for sale.
4. Having Above Market Expectations
Sellers are often ambitious and want to achieve strong real estate goals at sale. However, these expectations can lead to listings that are priced too high above the market.
Commercial properties priced too high often turn away buyers. Most potential buyers, like sellers, want to optimize their commercial real estate profits and typically seek deals that have the best financial returns.
Pricing an investment too high can also lead to an extensive marketing period, low offers, pricing reductions, and ultimately seller frustration.
To get a market evaluation of a commercial property before listing, sellers can request a Broker Price Opinion from a local, knowledgeable, real estate broker.
5. Not Cleaning or Preparing Before Showings
It can be exciting having your first property showing. However, a huge mistake that sellers make is not cleaning or preparing the building before potential buyers visit.
An unprepared property can leave a bad first impression of the investment. This negative impression diminishes what the true value of the property is and the seller unfortunately may lose money on the sale.
In addition to cleaning, staging the commercial property can add to a strong first impression and a more motivated buyer as a result.
6. Lacking Patience
It’s understandable many sellers would prefer their investment property to sell “sooner rather than later”.
However, rushing the sale process can have a negative impact on the sale results. Impatience can lead to frustration with the lengthy sale process, and the real estate broker who is working to bring you the best offers.
Selling a property takes time and patience from both the seller and real estate broker. The average time for selling a commercial property is around six months, and can include dozens of buyers, showings, and offers before securing the ideal buyer.
Thinking About Selling Your Commercial Property?
Our team can provide you with a complimentary property evaluation. This 30+ page report includes financial analysis, sales comps, demographics, strategic marketing plan and more on your property.
Request your confidential property evaluation today.