Top 5 Tips to Sell Your Commercial Property
With memories of the festive season disappearing quicker than mince pies on Boxing Day, attention now turns back to working life. The Christmas and New Year period offers an extended time to reflect on the year past and also what the future might hold in the 12 months coming.
In commercial property, we often find that January is a trigger for landlords to put their property on the market for sale. This may be because they want to realise some cash before the tax year ends in April or, perhaps, move to larger/smaller premises in a different location. Whatever the driving factors, there are a number of key factors to consider before taking the next step.
In this article, we identified 5 top tips we recommend adopting if you are considering selling your commercial property.
- Understand your costs
Whether you are selling an office, shop or warehouse, there will be fees incurred, such as:
- Solicitor fees: A solicitor will charge a fee for the conveyancing work, but there will be additional costs for title searches.
- Commercial agency fee: Your selling agent will charge a percentage fee based on the eventual sales price.
- Marketing costs: You will need to cover the cost of a marketing board and website listings.
- Mortgage redemption fee – if you have a mortgage on your commercial property and you pay this off early, you may be liable to pay a redemption fee.
- Removal costs – if you have equipment, furniture, or other assets in your commercial property and these are not part of the sale, you will need to arrange for these to be removed at your cost.
This list is not exhaustive, and there may be other fees to incur, so make sure you have done your sums in advance.
- Instruct a market valuation
The value of your property is subject to a number of factors including location, condition, its age, and availability of similar properties in the surrounding area.
If the property is being sold tenanted, i.e. as an investment, the valuer will need to examine the lease, consider the rental income, and research sales of a comparable nature to determine an appropriate yield to apply on the income.
There are many factors to consider, so we would recommend seeking professional advice and instructing a valuer at a firm who is a member of the Royal Institution of Chartered Surveyors (RICS), such as Allied Surveyors, to provide an up-to-date market value.
- Appoint a solicitor and do your own legal due diligence
You may already have a relationship with a firm of solicitors who provide commercial property expertise. If not make sure you instruct a practice who can provide the services required so a quick and efficient sale can progress. Their job involves looking after any deposits, arranging the exchange of contracts, confirming monies have been transferred and guiding you through the legal process along the way.
It is imperative you know what it is you own. You may think you do but there is no harm in checking your legal title. If there are any quirks in the title, such as a shared boundary or restricted access rights, it’s better to know this in advance. These matters may seem fairly insignificant, but they can often frustrate transactions and lead to a buyer seeking to chip money off the price.
And remember, you will need to provide various statutory items for a buyer, including a valid Energy Performance Certificate (EPC), asbestos survey (if applicable), fire risk assessment (if applicable) and Electrical Installation Condition Report (EICR). These items will be exchanged between the appointed solicitors, but it is worth making sure you have these items on file in advance of commencing the sale process.
- Carry out any repairs
First impressions certainly make a difference, so it’s important your property presents well. As agents we often walk into a property having been instructed to sell and the basics haven’t been done: the windows are filthy, there’s light bulbs not working, the paintwork is scruffy, rubbish has been left lying around and so on. Not surprisingly, these are things buyers spot when they come to view.
If you have a tenant already in situ on a full repairing and insuring lease, the tenant will have responsibility for maintaining the property in good order. If not, and the property is vacant, or your tenant is only responsible for internal repairs, then it is likely that you will have liability for repairs.
- Instruct a RICS Accredited Commercial Agent
As well as a solicitor, you will need to appoint a commercial agent to sell your property. You can, of course, undertake this part yourself, but we would recommend appointing a commercial agent who is RICS accredited. You can, of course, attempt a sale yourself, but placing a skew whiff A4 piece of paper in the window with ‘For Sale’ written in marker pen or putting the property on Gumtree rarely leads to results.
Most commercial agents like Allied Surveyors list their properties on recognised commercial portals such as Nova Loca or Rightmove, meaning your property will be professionally presented to as wide an audience as possible. A well-connected agent will likely have a database of potential buyers who can be tapped into at the outset.
Your agent will also create sales particulars, arrange for a marketing board, carry out any viewings, negotiate terms and instruct your solicitor on the agreed terms.
How We Can Help at Allied Surveyors
Allied Surveyors offers a spectrum of agency, valuation, and building consultancy services across our commercial centers in Edinburgh, Glasgow, and Inverness.
Additionally, valuation services are available at our regional centers in Aberdeen and Dumfries. Explore the commercial pages on our website for comprehensive contact information and insights into our services.
For a successful and informed commercial property sale, consider Allied Surveyors as your partner in navigating the intricacies of the real estate market. Whether you're selling an office, shop, or warehouse, our team is equipped to provide expert assistance at every step of the way.
Visit the commercial pages of this website for contact information.