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Best Way To Sell Commercial Properties

Right now is a great time to sell commercial real estate in general, but especially in Southern California where my primary market is.  Why?  Sale prices are at all-time highs, there is very limited supply inventory (so not much on the market for sale), and all kinds of buyers are looking to buy what little amount there is available for sale –driving up prices with multiple bids usually.

So, why should a seller hire a broker and pay him a commission when a seller can do it on their own?

  • Simply put, the seller will not be able to get the maximum price that a good broker can.   Many brokers have clients waiting in the wings to buy a property and these clients will pay top dollar if they are allowed to make the offer first.  Also, the price a broker is able to sell a property for more than pays for their commission.
  • Sellers don’t have the same marketing ability as a broker.  The world has become international and your reach has to be international.  The dollars are flowing into the US from other countries right now and international buyers are willing to pay more many times.  Brokers also know what is needed in terms of a marketing package to interest buyers. It’s complicated, expensive, and time consuming to put this package together properly.
  • The timing of when to put the property up for sale is critical.  When is the market peaking?  Is there a lot of competition on the market for sale now?  Good brokers will usually know what is for sale on the market as well as off market, but sellers won’t.
  • The repairs that you need to make to the property before you put it on the market are also important.  Some are worth making and some aren’t.  A good broker usually knows what to recommend.
  • What should the asking price of the property for sale be?  What if there are no comparable prices for the sales price because the sales price is higher and the property won’t appraise for the sales price?

There are many other factors in selling a commercial real estate property; but, in my opinion, it starts first and foremost with the right broker.  Doing it on your own is always a mistake.  If you don’t hire the right broker or if you do it yourself, it will cost you.  I have seen it many times.

 

 

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Best Way to Find Commercial Properties to Buy in Southern California

Right now is a great time to sell commercial real estate in general, but it’s an especially great time for it in Southern California where my primary market is. Why? Sale prices are at all-time highs. This translates to a very limited supply of inventory –there is not much on the market for sale. All kinds of buyers are looking to buy what little amount of inventory there is available for sale and, as a result, they are usually driving up prices with multiple bids.

So how do you, the buyer, find anything to buy?

1. Don’t try and search on your own for a property to buy. You simply won’t be able to find all of the properties out there and especially the ones not listed for sale. Hire a commercial sales broker that is experienced and knowledgeable in the market you want to buy in. Don’t use a broker that also does residential sales or doesn’t specialize in the specific type of commercial building you are trying to buy (for instance, don’t use an apartment, office or industrial broker to buy a retail property). The sales commissions are paid by the seller, so you don’t get a discount by not using a broker. Therefore, it’s a no brainer to use a broker.

2. Some of the best deals on commercial properties are for those properties that aren’t yet on the market listed, but are still for sale. How do you find these as a buyer? The broker you pick has to do this for you. So, make sure you pick a good one that knows how to find the properties like these that aren’t currently listed but are either still for sale or properties that an owner would be willing to sell.

3. You have to get prequalified and make sure that you are set to go when you find the right property. This will also help you in your search to know exactly what you can and can’t afford and/or what you need to target your buying search for.

4. Your broker has to set up search parameters and alerts for the online sites like Loopnet and CoStar so that, if and when a property is listed for sale that meets your criteria, you know about it the same day it happens. I can’t tell you how many times my buyers have simply been able to complete a purchase because I was able to show them the property immediately when it became available and we got to it first and were prequalified already as per #3 above.

There are many other factors in finding a commercial real estate property to buy, but it starts first and foremost with the right broker. And doing it on your own is always a mistake. If you don’t hire the right broker or do it yourself, it will cost you. I have seen it many times.

Feel free to contact me for help on these matters at 805-217-0791 or david@djmcre.com