How to Sell your commercial property in 90 Days
Why Traditional Commercial real estate takes so long
Have you ever bought or sold a commercial real estate asset? Now, if you have I’m sure you are no stranger to the longevity a deal can have. Historical ways of marketing a commercial real estate property are slow and arduous. In the past when you would hire a commercial real estate broker they had put a sign in the yard and maybe make a few phone calls. With the advent of the internet, they now throw the property online and hope they have some traction. Even with minimal use of the internet is important to understand how these commercial listing websites work. As well as how the end user of the property is searching and interacting with commercial real estate as a whole.
Furthermore, there’s a dirty little secret about how commercial real estate brokers act when they have a listing. Once they obtained an exclusive right to represent you on a property they may do everything they said in their marketing packet. This may range from professional photography and putting it on the listing websites as well as placing a sign in front of the property. This of course is effective, but that does not mean they are capitalizing on all the opportunities.
The Truth About Your Commercial Real Estate Listing
The dirty secret is the traditional commercial real estate broker may receive offers immediately or within the first few months of obtaining that listing agreement. What they do not tell you as an owner is how many offers they’ve received. Many times these offers will come in from other Brokers. Meaning the commission is split between two firms. The traditional commercial real estate broker that has the listing will tell the other broker that they are already under contract.
Why would the listing broker do this? the listing broker tells the potential buyer’s broker that the property is no longer available to keep all the commission. Instead of splitting it two ways, they want to be able to do the deal entirely on their own and therefore collect all the commission. Now, there are a few things wrong with this. It is a disservice as well as a violation of ethics to your client. Unfortunately, the practice is all too common in our industry. However, if you work with us this will not be the case. We will present all offers to you no matter who they come from.
So why go to the traditional route when you can sell your property quicker, view multiple offers, and close without going through a long due diligence period? TOA Commercial and The Office Advisors can tell you how.
How Can We Sell Your Property in 90 Days?
Besides the obvious of contacting us first. The number one step is analyzing your property and its value. We make sure that you the owner and we are on the same page. Wanting to obtain the highest and best value for your property is everyone’s goal. That is why our team will sit down and go through the numbers into a value analysis of your commercial real estate asset. This is done through a variety of methods. However, as a commercial real estate asset it is important to understand that investment properties are one thing and owner user or vacant properties are another.
Moreover, when it comes to an investment property the buyer is purchasing the lease as the building just happens to come with it. This is an old quote that stands true when it comes to a commercial real estate investing tactic. The lease or single lease is the value of the property. That is because the cash flow is generated from the tenant. Therefore, it doesn’t take us much information initially to give a valuation of your asset. Our team can give you a fairly accurate analysis with just a profit and loss sheet or even your basic NOI.
From this initial information, we are able to give you what an honest value on the market will bring. Now, not all properties fit our 90-100 day sell model. However, many of them do and this option owners are choosing more and more each month.
Utilizing Technology And A Team To Sell Quick
Now, the real Secret Sauce which is not too secret we’re about to let you in on. TOA Commercial utilizes a commercial real estate bidding platform. Now before you get antsy and think that an auction or bid website has a negative connotation, I suggest you keep reading. The website is called Tenx.com. they are our partners and part of our team behind the scenes. There are many benefits in utilizing this platform and the entire staff and team behind it. You will not only get us a licensed commercial real estate broker but individuals who analyze commercial property on a daily basis. There’s also so much upside with doing it this way just wait to hear what we have in store.
Step 1 Analysis
The first step starts back with the analysis portion. Not only do you the seller and us the broker come up with a price that is realistic. the team at TenXhas an army of analysts who will cut off their own valuation as well. They’ve sold over a billion dollars in real estate and understand what the market has an appetite for. It doesn’t matter if it’s an industrial, retail, or even class multi-family. It is important to understand how to position your property right in order to get the highest and best offer for it. After a short time. They will come back to us with what price it should be brought to Market. Now, it is important to understand that this price is not divulged to the potential buyer pool. On the day of betting they will be notified once the reserve amount is met.
Step 2 Marketing
So before the property is a bit on there is a large amount of marketing that goes into it. As an owner of commercial real estate assets, none of this cost is passed on to you. It is all fronted by us the broker and the company 10x. We will put behind as many professional marketing materials as possible. As well as utilize its traditional methods of calling potential buyers as well as other Brokers about the property. When working with TOA and TenX you will get the most premier marketing possible. There is drone photography without a couple as well as professional photos of the entire building. It has been placed on Costar LoopNet and their other commercial listing websites. some traditional methods such as email blast signage and cold calls are still being done in the background. Generally the marketing portion last 30 to 45 days. During this time due diligence materials are posted so any potential buyer is aware of the entire property and what goes along with it.
Step 3 Biding Goes Live
Now after the marketing has been executed the fun part begins. Is the day of the online auction. Actually, it’s typically a two-day auction where qualified buyers are placing binding bids. Now that is key all these offers are completely binding and contractually obligated. Therefore, the bitters are provided for this reason. 10x will allow Bettors 110% of their cash value. So a potential buyer is already provided in order to make sure they have the qualifications to purchase your commercial real estate asset. This is a major thing especially if you’ve ever gone through a commercial real estate transaction before.
So after the hype and the reserve is met, or in many cases exceeded. A Contract is sent for signatures immediately. Going above the reserve price is common because the team of analysts and professionals at TENX coach on proper pricing. Once the bidding is over a contract is awarded. Then it is on to payday.
Step four contracts and closing
Lastly, after the bedside and Dave auction, it is important to move to everybody’s favorite day. That is of course closing. So what happens after a buyer has met the reserve or exceeded it in one? A contract is signed by the buyer within 2 hours of the auction ending. Furthermore, there is a nonrefundable earnest money deposit that is due within 24 hours of the contract execution. So that way there is some skin in the game and even if they do end up backing out there’s some money that changes hands.
Now, many of our sellers make a statement about not wanting to go back and forth after all of this on the due diligence materials. The beauty of the system is that all of these purchase and sale contracts are non-contingent and there’s a set closing. Which averages about 30 days. Almost all properties from conception to close range between the 90 and 120 days. Most of them fell below 100 days to close. So now doesn’t that sound like a better option than the traditional ways of marketing? Of course, it does. Get your property sold faster and for more money with less headache. Contact TOA Commercial to learn more today.