byAziz Khatri01/09/18Commercialrealestatesalestransactionsare very unique and demand specialized knowledge. Very few peopleknow the ins and outs of a commercial property sales process. Theprocess is designed to bring maximum return on investment and it’svitaltorealizehow to do it.Commercialreal estate relies on relationships for everything to go smoothly.The relationships you build in the long run will help decide yoursuccess in selling your property.Thisarticle is for those who own commercial real estate and:1.Want to understand the process.
2.Want to create the important relationships needed for a successfultransaction.3.
Want to meet an expert in all phases of selling commercial realestate.Ifyou are interested in selling please contact Aziz Khatri for a freeevaluation and estimate.Commercialreal estate brokers must know have a plethora of skills to navigatethe process of selling for maximum benefit. Theyshould have experience incommercialproperty negotiation, marketplaceevaluation, monetaryanalysisinterestbased evaluationrealvalue based evaluationtrainingother commercial real estate agents.Propertyuse zoningtaximpactsOneof the biggest impacts your commercial real estate broker can have onyour sale is his knowledge of the modern day commercial actualproperty process.Thereare three main stages of selling commercial real estate:1.Preparationfor sale2.
The Outreach3.The SalesIt’simportant thateach one of these stages is done well soyou get the maximum value for your property. Each stage has specificmilestones that should be done correctly to maximize the return onyour investment:1.The Preparationstage:A:The Seller’s Goals DiscoveryThefirst thing that an expert commercial real estate broker analyzes isthe Sellers Goals. This might include such questions as:A.Is realizing capital appreciation the #1 goal of the sale?B.What are you planning on doing with the proceeds of the sale?C.Is a lump sum preferable to a monthly income (or vice versa)?D.
Are you purchasing another building via a 1031 exchange?E.Are you aware of the tax implications and how to mitigate them?F.Do you need the capital for a specific reason?G.Is there a “due on sale” clause?Thesequestions and more will help you structure your sale to fit yourneeds.
The answers to these questions can also give you a betternegotiation in the sales transaction and realize greater profits.B.Property Valuation: Buyersof commercial property are usually very interested in the income theycan derive from the property. So the value of your property isdirectly tied to the net operating income of the property.
Netoperation income can be influenced greatly by:1.Comparable sales prices.2.Local commercial real estate leases.3.The terms of the sale4.Capital terms5.
Taxes6.And more.Anotherway of saying this is the value of the property is determined bydividing the net operating income with the area’s capitalizationrate.
Commercial brokers like Aziz Khatri are experts in helping youdetermine these factors so you can get the best price for yourbuilding. C.The Marketing PacketThemarketing packet is the tool that sells prospective buyers on thevalue of your building. It’s goal is to put all the importantinformation about your property in one packet. This makes the buyersdecision much easierto make and presents your property in the best light.
Theelements of a successful marketing packet include: a.Design.Lookingpretty works for real estate and it works for marketing material too. Aziz and KW have designers ready to create a marketing packet thatis attractive and puts your property in the best light.
b.Simplicity.Along with design making the information easy to find and understandis important to busy professional real estate investors. Make iteasy to find and understand the deal highlights. c.TheStory. Whyis this property worth a look? Tell a story with facts that tell an irresistible story with a hook that pulls in the investor.
Whatis it’s unique value? Weave a story around that and you’ll pullin even the busiest investor. d.The Photography.Photosalso tell a story and are the first thing that grabs attention in any presentation. You should have a variety of high quality photosthat give the buyer insight into the value of the property. Thesephotos should include a cover photo, aerial photos, the bestexterior angles, etc. e.
The Financials. The marketing packet is more than just surfacelevel promotion. It should go into detail about the financialconsiderations of buying the property.
Things like the rent roll, net operating income projections, local market data and more. Allthese are relevant to investing in commercial real estate and doingthis well will show you’ve done your homework and can justify thepurchase price. f.The Polish.
In addition to these critical components yourmarketing packet should have the important part of any sales documentthat increases its credibility and usefulness. These include, theinformation disclaimer, the real property highlights, maps, and thecontact’s (broker) identification. 2.The OutreachStage.A.Reaching out to Qualified BuyersOneof yourbroker’s primaryresponsibilities is to publicize and market your commercial property.
Many commercial property listings don’t even use MLS.Yourcommercial real estate broker knows that the key to a successful saleis finding buyers who are qualified and appropriate buyers. That’swhy listing on the MLS is often not the key to a successful sale. Having relationships with nationwide network of seasoned commercialproperty owners is an invaluable resource for sellers. Aziz Khatriwill immediately contact his list of qualified buyers and personallyshow them the value of your property. B.Interviewing Buyers. Onceindications of interest start to arrive, its important that eachpotential buyer beinterviewed in detail tomake sure thatyourtime is not wasted.
You don’t want your deal to fall apart nearclosing because the buyers was never qualified in some way. AzizKhatri is an expert at determining the real interest, experience andresource qualifications necessary.C. EducateBuyersOftenqualified buyers may show interest, butneed more information to commit. AzizKhatri is an expert ineducating buyers in all the benefits of your property. Therehave been many times when acommercial property buyer didn’t see the potential in a buildinguntil Aziz enlightened them to its benefits. Thisbuyer education resulted in moving the purchase forward andultimately higher prices for the property.D.
The Confidentiality AgreementIfthe buyer or seller wants the sale to be confidential the timing ofsigning the Non-Disclosure Agreement (NDA) is important. Doing thisafter interest has been shown will protect both parties. Itsimportant for your commercial real estate broker to know how and whento get this signed. Beforethe marketing packet is sent is the best time, since the marketingpacket can contain sensitive information.E.
Sharing the Marketing Packet with the Buyer.Oncethe preliminaries have been confirmed the buyer will have theopportunity to view the full marketing packet. The marketing packetcontains high value information and shouldn’t be distributed toeveryone. That’s why its critical for a broker like Aziz to helpcreate the packet and position it correctly for the buyer.
F.Seller Meets BuyerThiscritical step usually takes place after the marketing packet has beensent. If the buyer expresses interest and is qualified the seller andbuyer should meet to begin the sales relationship. The broker ispresent at this meeting, and when representing the seller Aziz willshow the seller how to position himself and his words to obtainmaximum leverage and return on investment.
Azizhas done this hundreds of times and knows how to manage the meetingfor the maximum benefit of his client. 3.The Salesstage.Nowwe enter into the final stage of the transaction. With transactionsas important as yours it is important for all of the previous stagesto go smoothly. Now that the negotiation and transaction stage hasbeen reached your broker will really prove his worth.
A.TheOffer and CounterofferIfthe meeting goes well the next step is the offer. The buyer’sbroker will help draft an offer for the commercial property. Theoffer usually has information about:price,terms, earnest money, bank financing, seller financing, assignment,due diligence period, closing date, utility charges, seller’sdisclosure, promissory note, deed of trust, andmore.
Oncepresented to the seller, a counteroffer can be made on the seller’sbehalf. The commercial real estate broker (Aziz) will guide theformation of the counter offer and make sure that all the sellersconcerns are accounted for.B.Due DiligenceAfteran offer is accepted the buyer has the opportunity to do his duediligence to confirm the property meets all his needs. Your brokerwill manage the process of getting the buyer any information heneeds. Making sure that the current tenants use of the property isas uninterrupted as possible is also part of the brokers job. C.
TheInspectionAspart of the due diligence a full inspection is expected by the buyerand seller. The inspection is also important for any banks,investors, or partners. A commercial inspection usually has severaldifferent parts, including engineering, appraising, contracting, and….
.Thereare “gotchas” that can derail a sale in this stage and yourbroker Aziz will help navigate you through this step.D.The Waiver of Contingencies.Thewaiver of contingencies is a _____________. It’s an important stepdesigned to make sure the seller is protected from aborted sales andwasted opportunities. Your broker will negotiate the earnest moneyand the waiver and make sure that it is signed so the buyer cannotback without losing his earnest money.
E.Escrow ClosingShortlyafter the contingencies waiver both parties will want to escrow closeon the property and finish the transaction. Important parts of thisstep are escrow agents, title company, any banking or investordocumentation. If this is done in an organized and experienced mannerthis can be the least stressful part of the sales process. Everyoneis ready to move on and your broke will help everyone with the manyclosing details.KWCommercial and Aziz Khatri find you premium buyers.KWCommercial is the premier commercial real estate broker inCalifornia. Aziz Khatri specializes in getting maximum value for yourproperty.
He does this by understand that each commercial property isa business with revenue, income, and real value beyond the buildingmaterials.Azizhas ready buyers for multiple types of property. He is an expert in1031 exchanges and knows how to create financial leverage for hissellers. He doesn’t settle on the first offer from his network ofbuyers, he uses his outreach to create the largest pool of biddersfor your property. He does this with:1.
Direct mail to known buyers2.Direct calls to his network of professional real estate purchasers.3.
Using the KW nationwide network of qualified buyers4.Aziz..
.please let me know ofany other tools you use tofind buyers.Connectwith us now at ___________Foryour confidential consultation with Aziz to discover the value ofyour commercial real estate and the temperature of today’s marketin your location. Receive your free valuation estimate with noobligation.
There is never any cost to talk to Aziz about your plansand your property. Call now!