Unless you plan to pass the property down to your family after your death, there comes a time when every commercial real estate investor begins to think about selling their property. Everyone will have different reasons for selling their property, but almost everyone will have the same goal in mind when selling, and that’s to get as much money as possible for their commercial property.
But how can you work to maximize the return on investment and get high offers on your property? In today’s blog, we explain what you can do to get more money when selling your commercial property.
Getting The Highest Offer For Your Commercial Property
There is no one-size-fits-all playbook for always getting top dollar for your commercial property because these assets can vary wildly and require individualized attention when working to maximize profit. With that said, if you keep the following tips in mind, we’re confident you’ll be making it easier for prospective buyers to see the value in your commercial property.
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Consider The Market - When it comes to the stock market, “time in the market beats timing the market,” but when you’re selling a commercial property, timing the market is key. Of course, you don’t have access to a crystal ball that can predict the future, but a review of economic data and recent trends can paint a picture of whether we’re in a buyer’s or seller’s market. If you can time your sale during a particularly strong economic period with favorable interest rates for the buyer, you may be able to ask more for your property. However, waiting too long in order to perfectly time the market can also backfire, so while giving the current economic market consideration, don’t assume that conditions will improve if the data suggests now may be a better time to sell than one, three or five years down the road.
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Clean Title - A clean title free of liens or potential issues is always preferred by the buyer, and it can certainly help you get more for your sale. The team at Commercial Partners can help you address any potential issues with your title before you buy or if there are matters that should be accounted for prior to a sale so that the next buyer comes into the property with a clean title.
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Fair Pricing - Run a couple of market assessments or have a commercial real estate professional run them for you so that you can get an understanding of what a fair asking price is for your property. Setting a fair price for your property can pique the interest of multiple buyers and lead to a bidding war where an escalation clause brings in top dollar. Asking too much for your property can scare off buyers who are afraid of insulting the seller with a lower offer.
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Address Known Issues - While cosmetic improvements may bring your property more curb appeal, it’s essential that you address any known issues that will arise during the due diligence period. If there are known issues with the foundation, electrical, sewer or roof, prepare to fix them so that they don’t end up sinking the sale. You may not be aware of any current issues with your property, but it doesn’t hurt to fix known issues prior to listing a property for sale because this means less work for prospective buyers.
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Get Your Financial Records In Order - If you’re selling a business as opposed to something like hunting or farm land, you’ll want to make sure that your financial records are in order. Having clear records of cash flow, revenue, expenses and profit margins can all help showcase to potential buyers that they are competing for a successful business. Prepare simple and accurate financial records to enhance the value of your property.
At Commercial Partners, we know how to help our clients maximize the return on their commercial investment, and we’d love to do the same for you. For more information on how we can assist, or to set up a consultation with our team, give us a call today at (612) 337-2470.