Real Estate
Buying and selling commercial real estate can be an extremely lucrative venture; however, it can also spell financial disaster if you make a mistake. Often, investors make the mistake of assuming that selling a piece of commercial real estate is basically the same as selling residential real estate. In reality, they are very different. Typically the buyers, laws, procedures and financing are all different when commercial real estate is involved. Consider the following tips if you plan to sell commercial real estate:
- Setting the right price is crucial, yet complicated, with commercial property. Numerous factors affect the price including location, improvements, neighborhood trends, and zoning. Having a professional market analysis done is a good idea.
- Know the zoning laws. Zoning is everything when it comes to commercial real estate. Zoning laws are also subject to change—and do change—on a regular basis. Make sure that you consult with someone who knows if the laws have recently changed or if there is any legislation pending that might change your property’s zoning in the near future.
- Be an advertising guru, or hire one. Advertising is always an essential component in the sale of property; however, because you are trying to reach a much smaller market of potential buyers when selling commercial property, advertising is even more important.
- Make sure you understand the process. Buyers in the commercial real estate market are typically seasoned veterans. Sometimes, this means they will not hesitate to take advantage of someone who is not. If you do not know the process inside and out, make sure that you retain the services of someone who does in order to avoid this possibility.
- Be prepared to wait. Of course some commercial property is snatched up the moment it is listed for sale, but as a general rule the commercial real estate market moves at a slower pace than the residential market.
- Be certain that you understand the legalities. Contracts for any sale can be complicated. Contracts and the supporting documents that go along with the sale of a commercial property can be very complicated and verbose. If you have any doubt about your ability to understand them, use a professional for the transaction. Given the amount of money that is likely at stake, this is truly one of those situations where it is better to be safe than sorry.
If you choose to go it alone, heed the preceding tips when selling a commercial property. Your best bet, however, is often to use a professional who specializes in the sale of commercial property.
As always, contact me with any questions.
Rob Cassam
