Ultimate Guide To Sell Your Asset (FSBO)
A. Advantages
B. Sellers Guide (FSBO)
C. Transaction Process Overview
D. Your Asset Guaranteed To Sell
A. Advantages
1. For Maximum Profit:
If you are looking forward to making maximum profit from selling your commercial estate, then a broker is not a good option. If you use the service of a broker to sell your commercial estate, then expect to give away 3-6% of your total sale as commission to the broker. Note that this 3-6% is not from the profit made but from total sales. What if your profit is between 3-6% or even less than 3%? Selling without a broker will help you save hundreds of thousands of dollars or even millions, depending on the size of the commercial property.
2. You Sell Faster:
It is a known fact that assets sold by FSBO (for sale by owner) sell faster than assets sold by a broker if done correctly. So, aside from making more money from selling your commercial estate by yourself, you can make that money in less time. One reason why this is true is that you are not the only client a broker has. This is even worse when they have bigger clients that they can make more profit from after selling their commercial estate. Many have complained of their broker not returning their calls on time or missing deadline.
3. A Middle Man is Time Consuming:
Multiple middlemen is also a major challenge. A broker is automatically a middle man between the seller and the buyer. Sometimes, both the seller and buyer hire different brokers for the transaction. Both brokers may end up fighting back and forth to defend the interest of their employer. This is usually time-consuming. The seller’s broker will call the buyer’s broker for information; the buyer’s broker will then call his employer for the information. When he gets it, he then calls back the seller’s broker, who then calls the seller. Isn’t this tiring and time-wasting? When you cut off the broker, you reduce the middleman and deal with your customer directly, thereby saving valuable time.
4. A Better Way To Sell & Source?
Go to any “Mastermind – Masterclass” Seminar and your will definitely hear “off-market”
5. Targeted Professional Owners Waiting To Buy Your Asset:
When you want to sell your multifamily asset and need a huge group of buyers to sell to this is the platform to use. This is specifically targeted multifamily professionals looking to acquire your asset.
B. Sellers Guide (FSBO)
1. Be willing to make some expenses:
Selling your commercial estate doesn’t just come for free, although it is far cheaper than using a broker when you are doing it yourself.
Before selling your commercial estate, it would be best to make sure that the property is in good condition – free from maintenance problems, dirty or damaged flooring, appliances in working order, etc. You can’t know this if you don’t employ the services of other professionals, like appraisers, contractors, maintenance personnel. If the professionals certify that there is a need for some repair, then it is strongly recommended these repairs are done prior to listing the property on the market for buyers to view.
2. Employ the services of an inspector:
The next thing to do after setting some money aside for expenses is to employ the services of a certified inspector.
The responsibility of the inspector will be to inspect the overall estate to check for any damage to systems such as electrical, plumbing, sewer and also specific items throughout the property like air conditioning or HVAC units, lighting, flooring, and especially hazardous items like loose wiring or dangerous substances on the property, before putting the property on the market. This is important because nobody will pay top dollar for a building that is not in good condition, and if they do, they will ask for severe discounts in order to take care of the items themselves. Some buyers even go to the extent of getting the services of an inspector to inspect the building they want to buy before buying it. Having the inspection report for any potential buyer would put a lot of concerns at ease and will allow for a much smoother transaction with a lot less surprises.
3. Make all the necessary repairs as suggested by the inspector:
After the inspector has finished inspecting your commercial real estate, you will be told what parts of the building need repairs or a general face lift.
Depending on your budget, you will be advised on which part needs the most attention and which parts can be overlooked.
After all the necessary repairs have been suggested, you will need to spend additional dollars on getting the services of a professional contractor to help with the necessary repairs suggested by the inspector. It is important you don’t attempt to do the repairs yourself (unless you are a licensed contractor) because if the seller has issues with items after sale, they can always come after you in a lawsuit. Your buyers will want professional repairs on the damaged parts of the building and for the seller to provide documentation (invoices) of the work done properly.
4. Get the services of an appraiser:
After repairs have been carried out, the next step is to get the services of a professional and independent appraiser. The responsibility of the professional independent appraiser will be to conduct a thorough walkthrough all over the building so that the value of the property can be determined. This is very important. The appraiser will look at comparable sales of similar properties and also the income of the building currently (if any) between these two metrics they will use one or the other to determine the value of the building most closely. The overall money spent on these professionals is a few dollars compared to giving out 3-6% of your overall sales. Aside from the number of repairs that have been carried out, other factors that determine what the value of the property will be is the location of the estate, the price of other properties that have recently been sold in the same location, the amenities within and around the estate, and lots more.
5. Prepare the property for the unveiling:
After all the repairs have been done, the property appraised, and the sale price fixed, the property needs to be prepared for the unveiling.
To do this, the services of a professional cleaner are needed. The responsibility of the cleaner is to make sure every nook and cranny of the commercial estate is neat and presentable. It is important to note that the need for the services of a professional cleaner depends on the size of the property but also the type. If you own a small commercial property that you want to sell, you can clean it yourself but it is always recommended you use a professional cleaner. This will save you additional expenses.
6. Advertise with MULTIVESTED:
If everything listed above has been duly followed, then it will be time to advertise your property to prospective buyers. Advertising with MULTIVESTED is the best thing you can do for property exposure. We give you access to a community of multifamily professionals with a minimum $5M AUM under management. All you need to do is have some high-quality pictures of the property, and necessary operating financials (T-12, rent roll) and any other pertinent info on property, which you can upload to the platform. Aside from posting on platform, you can become a member and invite anyone else that meets the member rules of site to view your property.
7. Prepare yourself on how to negotiate and close the deal:
This shouldn’t be a big feat if you have ever bought properties before. You already know the value of your property, as well as the intimate details of the subject property. When you receive an offer that is satisfactory, review carefully with an attorney and open escrow. It is important to brush up on your negotiating skills so that you will get a fair price. Iron out the important terms such as – purchase price, due diligence time frames, escrow period, repair costs if any, etc. Once you get a fair offer, go ahead and close the deal.
8. Get your real estate attorney ready:
When your advertising pays off, the next important step is to bring in your real estate lawyer to help draft out a sale contract.
One thing the lawyer will do is to ensure that the sale complies with all the state and local laws. In addition, make sure that your rights as the seller of the property are protected. So, What’s the Next Step? It is cheaper to sell your commercial estate without a broker. However, it is important to be adequately prepared because it needs extra time and work. If not done correctly, you could sell for less than market value, be legally liable for not disclosing items on the property, and have a multitude of other additional costs.
C. Transaction Process Overview
1. Letter Of Intent (LOI)
This typically acts as a basis for further negotiation & does not bind the parties to close the sale of the property.
2. Purchase Sale Agreement
A Real Estate purchase and sale agreement is a hybrid between state laws governing contracts & those governing Real Estate. Every provision is set -up for negotiation. The purpose of a purchase & sale agreement is to specify each parties rights, obligations, & liabilities; it details the steps of the process; & defines the property is being conveyed.
3. Title & Survey Matters
Title searches are typically prepared by title companies. The title company or title agent typically issues a commitment for title based on the results of the title search.
4. Closing Documents
Closing documents including, but not limited to, deed, bill of sale, an assignment of contract rights, a certificate that no tax is to be withheld under the Foreign Investment of Real Property Tax Act of 1980 (FIRPTA), closing statement, transfer taxes, & Real Estate taxes.
5. Closing
Closings for commercial transactions are typically escrow closings. In an escrow closing, the escrow agent holds all of the original closing documents and funds pending the closing. If it is not an escrow closing, it will be a sit-down closing.
6. Post-Closing
Sometimes parties’ obligations do not end with the closing. There might be some other steps that should be followed after closing such as, ensuring that all required notices to tenants & service contract providers are delivered promptly following the closing, ensuring the filing & recording in the county recording office of all original documents requiring recordation.
D. Your Asset Guaranteed To Sell
1. We have Auctions (7 Days) or Off-Market FSBO (Time duration you choose) Options.
2. If for some reason your Asset does not sell… We take your listing to a outside partner brokerage to see if they can get a different result.