If you thought selling a home was a complex process, try selling a business. It’s a minefield of challenges that a commercial REALTOR® is well-situated to navigate.
Following are three main reasons why you should use commercial Realtors when buying or selling your business.
1. Marketing Ability
Private sellers do not have the same marketing ability as commercial Realtors. Through their brokerages, commercial Realtors have access to a large pool of motivated buyers. For example, commercial Realtors can market property to other Realtors on the OREA Commercial Property Database. And, the greater the buyer pool, the more likely the property will be sold quickly and at a better price.
In addition, commercial Realtors can help seller clients locate and market different types of commercial real estate, such as office investment, leasing, and franchise and business opportunities.
2. Specialized Knowledge
Many commercial Realtors have specialized knowledge that could prove invaluable when negotiating a transaction, such as space planning, zoning, environmental issues, appraisals, and financing.
3. Due Diligence
Commercial Realtors will perform due diligence, which means they will take all reasonable steps to confirm financial, legal, structural, zoning, and environmental concerns. Due diligence can range from a straightforward direct inquiry by the prospective buyer to a team of accountants, lawyers, and other professionals scrutinizing every aspect of a business or investment property and developing a substantial, customized audit.
For example, a financial/operational audit for an income producing property could entail an analysis of income statements, balance sheets, rent rolls and leases, bank statements, tax bills and returns, employee records, and operating costs. It could also entail an analysis of seller supplied documents, such as financial records, lease documents, inventory of equipment and other assets, utility bills, building service contracts, and insurance policies.
A legal audit could entail an analysis of title to the property and major assets, existing mortgages and other encumbrances, surveys, licences, contracts, permits, and zoning compliance.
A structural audit could entail a visual inspection of the building, a review of relevant documentation (and interviews, if necessary), identification of physical deficiencies, and a detailed summary report.
Stay tuned: Next week’s blog will highlight 36 questions commercial Realtors should ask clients.
REALTOR® is a registered trademark of the Canadian Real Estate Association (CREA). Only salespersons and brokers who are members of CREA, the Ontario Real Estate Association (OREA), and the local real estate board, can use the term REALTOR®.
Ontario Real Estate Association and Acronamic Learning Systems Inc. (2016). The commercial real estate transaction. Don Mills, ON: MediaLinx Printing Group.