As in any other industry the art of selling commercial real estate requires experience, knowledge, a clear understanding of the market conditions, and the ability to determine which investors would most likely be interested in the asset, and most of all locating a licensed commercial real estate agent or broker that possess all of these qualities.
Unfortunately during lean times many less experienced investors make the mistake of trying to list, market and sell their properties, with the hopes of maximizing their profits without taking into consideration how detrimental this decision can ultimately become. Even the most sophisticated of investors understand the importance of enlisting an experienced commercial real estate agent to represent them or their group. An experienced commercial real estate agent commissioned to sell a property serves as an arm’s-length intermediary to negotiate on a principles behalf, which can be much more effective than the principle trying to negotiate the deal. In addition, it deters high-pressure sales tactics that may be enlisted by the buyer’s agent, and protects the seller from potential pitfalls. Transactions represented by licensed commercial real estate agent have a higher probability of closing. Keep in mind that commercial real estate agents work on similar deals all the time, and in doing so their knowledge and contacts can well be worth the cost of a commission.
Commercial Real Estate Agent/Broker
When engaging a commercial real estate agent to possibly represent you in the marketing and sale of your commercial property, it’s vital to do your because an experienced Commercial Real Estate Agent can make the difference between consummating a successful transaction, and losing the deal due to incompetence
A seasoned and sophisticated commercial agent or broker can provide you with current knowledge of the market, and has experience in negotiating sales prices and contract terms and the strategy know-how in pricing your offer. The real estate agent also offers exclusive access to off-market commercial real estate opportunities that new investors may otherwise never had access to.
When deciding to sell commercial real estate one has to understand that there are many moving parts within a typical commercial real estate transaction and seasoned and sophisticated commercial agent or broker can provide you with current knowledge of the market, and has experience in negotiating on your behalf when it comes to price and contract terms. In addition commercial real estate agents must contend with the many issues that may arise during the course of a transaction, and are essentially the conductors of a symphony responsible for communication between buyers, sellers, escrow, and title all the while keeping the focus on closing the transaction in a manner that benefits all parties involved.
It should also be noted that prior to negotiating the sale of a property, the commercial agent must first collaborate with the seller in positioning the property in such a way as to best maximize the return during the sale of the asset. This typically involves researching the current market condition, running an accurate financial analysis showing the properties current performance, and comparing that information to that of the sale comparables of like-king properties in the area. This process allows the commercial agent and the potential seller to collaborate together in determining an appropriate list price to present to the market.
It also a good rule of thumb when deciding to sell a commercial asset to take the property to market during periods of high activity if possible. Commercial real estate prices are volatile and fluctuate quickly in conjunction with the economy. If you sell your property during a financial swell, you will realize a much larger return on your initial investment than if you part with it during a financial lull.
When positioning your property for a potential sale it’s important that you place the asset in the best possible position to maximize your return. Making capital improvements to the property prior to bringing the asset to market can attract many more potential buyers, and save you a great deal of money during contract negotiations, and possibly prevent retarding by the buyer when under contract. In addition the potential market value can appreciate depending on the improvements made
When you’re finally prepared to take your property to market, your commercial real estate agent will be responsible for exposing the asset to all potential investors. Experienced commercial agents typically provide their clients with a marketing strategy that will be followed over the course of the following months after bringing the property to market.
See Example 1.A
In addition to following the marketing plan, further exposure of the property will be conducted through the advertising of the property through one of the many commercial real estate multiple listing services (CMLS). These online services are extremely important in exposing the property not only to other commercial real estate agents, but to principles as well.
By following the basic steps outlined above one should have a general idea as to how to sell commercial real estate, and even though we can continue to discuss in further detail about all the different nuances involved in the marketing and sales of a commercial assets its vital to keep in mind that success can never be contributed to the acts of just one person, but more so to a group of people working together in a common goal, and this holds true in commercial real estate.
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