There couldn’t be a better time to sell commercial property in Colorado than now – the market moves quickly and investors are ready to purchase. The number one thing you can do, if you’re looking to sell your commercial property, is align yourself with a proven listing agency.
From a high level you will be looking for a commercial real estate company that has the market expertise to provide you with a solid valuation and high level research capabilities. A commercial agency will be able to develop a strong marketing plan on the front end and will perform professional negotiation and closing strategies on the back end – streamlining your sales process from start to finish.
If you’re ready to sell commercial property than this article will help you understand and prepare for the process. We will dive deeper into the process of listing commercial real estate for sale and provide you with valuable insight into the benefits of using a proven agency throughout the sales process.
When initiating a relationship with a commercial real estate agency, the first step is to get a Broker Price Opinion (BPO). Often the best way to understand the value of your commercial property is to pay for an appraisal. But when working with an experienced commercial real estate broker you can save capital on appraisal fees and still receive maximum value for your real estate through an agent’s BPO services.
Once your commercial asset is priced appropriately for the current market, it is time to move on to marketing. At this time you will collaborate with your commercial broker to gather all details about your commercial space for marketing collateral. A professional brochure that includes a floor plan is the initial “handshake” a potential buyer will have with your property. This brochure should include the listing price, space size, and the benefits of the property to paint a vision for the new buyer and their agent. This, along with professional signage are a great way to start marketing a listing to potential buyers.
Once a listing begins to attract buyers, the action truly begins! A good agency will train brokers on the right questions to ask potential buyers as part of a pre-qualification process. It is extremely important to pre-qualify buyers in their initial call prior to spending time touring with them.
Asking a buyer questions around their financing capabilities, though uncomfortable, is par for the course and goes a long way in making sure the agent is not wasting their client’s or the potential buyer’s time. Beyond financing questions, a few other things to consider are use and zoning, timeline for purchase, and the reason behind the purchase. Once a buyer is qualified, the site tour is a good time to build rapport with a buyer and discuss the trade area.
Once a qualified buyer becomes interested in the property, it is time to begin contract negotiations. An experienced agent will be prepared with key business and economic terms of the deal following a well received site tour. The agent will have paid attention to key issues and hot button items for the buyer, which they can then use to develop incentivized negotiations to achieve the best deal terms for the sale of the commercial asset. During this stage of the sales process, it is important to begin working with the lenders and the title company so closing expectations and a timeline can be developed.
After your commercial agent coordinates the earnest money and initiates the title transfer it is important to move quickly through the disclosures and due diligence. During due diligence, it is paramount that the sellers disclose key information and provide full support during the process. This includes delivering documentation in an organized and timely manner, making sure the building is available for inspection, and being flexible in giving access to the property.
At this time, it is also important to complete special inspections early and to provide the title company with the most up to date survey. Your commercial agent will facilitate due diligence with coordination support, and timeline management.
An established agency will already have systems in place to provide high level timeline management during the sales process. At minimum, your broker will set up a regular weekly call to review progress and identify any issues. Your agent will also work with the buyers on managing vendors, general contractors, and licensing agencies as well.
All of the above work is in preparation for a successful closing! And the most important aspect of reaching closing is often and open communication. Being actively involved in your sales process is a great way to ensure closing goes smoothly.
Selling commercial real estate is an involved process but working with the right agency who has in depth industry experience and market expertise is the best way to ensure you reach an advantageous deal. If this discussion brought up any questions on how to sell your Colorado commercial real estate, we invite you to contact a Transworld Commercial Real Estate broker.
Phil Kubat is the Principal & Managing Broker of Transworld Commercial Real Estate, a Colorado commercial real estate firm. Transworld Commercial Real Estate will serve as a strategic partner to clients for commercial real estate acquisitions and dispositions. Phil’s services include real estate advisory, site selection, strategic planning, incentive negotiations, development consulting, and financial analysis. In his spare time Phil enjoys hiking, skiing, golfing, and living life to the fullest!