In commercial real estate agency today, it is necessary to carefully consider the strategies of preparation when it comes to selling a property. Every property market will have factors of change and opportunity. On that basis, a new listing needs to be matched to the market conditions and the current levels of enquiry. It is the agent’s job to do that, however the client needs to give the agent suitable flexibility and commitment to the sale process.
It should be said that there are major differences in marketing strategy when you look at an open listing process vs. an exclusive listing. In an open listing, everything that occurs will be relatively generic and on that basis there will be little focus. If a client chooses an open listing process, then it any sale that happens will usually be a factor of luck more than anything else.
So the most important target in selling any commercial or retail property today is to use the exclusive listing strategy and system. Here are some ideas to help you prepare a commercial investment property for a future sale on that basis:
- Check out the existing listings and the other properties locally. Your find some that have been on the market for some time and from that you will understand the weaknesses of their marketing campaigns. You can therefore adjust your marketing campaign and improve the chances of inspections with your listing.
- Review all of the leases in the property to understand any weaknesses that apply to rental, occupancy, future growth, and tenancy activity. It is quite common for the sales agent to renegotiate a few leases prior to taking a property to the market for sale.
- Review the net rental that applies to your property today. That net rental will have some relationship to the prevailing market rental. In reviewing this income issue, look at the outgoings that apply to the property and make sure that they are of an industry standard per unit of area. If the property has excessive outgoings, then they will need to be addressed and managed prior to the sale process commencing. It would be unusual for a buyer of a property to take on a new purchase where the net rentals have been impacted by excessive outgoings.
- Understand the relationships that the landlord has with the tenants within the property. Any volatile or difficult situations between the parties will likely frustrate the sale situation. Most buyers will talk to the tenants prior to considering a purchase. Given that the tenants have been in occupancy for a long time, they will know the weaknesses of property occupancy and performance.
- The title ownership should be checked for accuracy and legality. The title should also be checked for any notices, orders, and other interests that can have an impact on the sale process and due diligence. Most buyers will undertake a due diligence process between date of contract and settlement. Any weaknesses in the property will be identified and they may have an impact on the settlement or the price.
So it is easy to see that there are many things to do here as part of preparing any commercial or retail property for sale. It is quite common for the sale preparation process to take some weeks prior to the commencement marketing. The focus in this preparation period is to remove any weaknesses from the property so that there will not be any hurdles in the inspection process.