How to sell your commercial property in 10 steps

Are you toying with the idea of selling a commercial property? This often proves to be a real challenge. What documents do you need to obtain? How do you set the right selling price?

To ensure that you do not make any expensive mistakes when selling on your own, I have prepared a step-by-step guide for you below. If you follow this procedure, you will shorten the selling time and achieve a fair market price for your commercial property in Tyrol.

10 steps for an easy sale of your commercial property

Step 1: Obtain the necessary documents.

In order to provide all relevant information to potential buyers, the first thing you need to do is obtain all the necessary documentation:

• Land register extract: This collection of documents is only complete if you actually obtain all sheets - i.e. the A, B and C sheet. You can obtain the extract either from a lawyer, a notary or from the district courts. You can also request the land register extract online. Please note that this will cost you between 5 and 20 euros. The exact fee depends on the scope of the query.
  Tip: You can also obtain the land register extract from a real estate agent without commissioning him or her with the sale.
• Building decision: The decision consists of a description of the legal status, the reasons and the instructions on how to appeal. It also includes the building permit. You should obtainthis document from the competent building authority.
• Building plans: At the building authority, you will also be given the building plans.
• Permission for use: You can obtain a permit from the municipality.
• Permit for operating facilities: If there are operating facilities in your commercial property for which a permit was required, this must also be obtained. You will need a permit if, for example, your operating facilities cause a nuisance to neighbours. Normally, you can requestthis from the district administration.
• Energy certificate: This certificate lists the most important key figures on the energy demand or consumption of the property. This document is issued by master builders, heating or electrical engineers or architects. The prices for issuing the certificate depend on the respective provider and the time required for issuing it.
• Rental contracts: If you have already rented out your property, the rental contracts must also be presented and shown to the interested parties.

Step 2: Create an exposé with the most important information.

Would you as a prospective buyer want to read all the documents listed above? No. Therefore, you should write a list or exposé in which you provide basic key data.

• Year of manufacture
• Useful area
• Land register encumbrances and land register rights as well as the so-called notices in the land register
• Any defects/damage
• Tanning (if there is no sun for a long time in winter)
• Any natural hazards
• Developments, such as supply and waste disposal lines
• Overview of operating costs

Step 3: Determine a reasonable selling price.

I don't want to scare you, but a fair market price is the key to a successful sale of your property. Ifyou ask too little, your offer will look suspicious or attract the wrong prospective buyers. Besides, as a seller you hardly want to give away part of your commercial property.

On the other hand, if you set the selling price too high, it will scare off potential buyers. If your property has been on the market for a long time, real estate professionals take advantage of this and push the price down. The price spiral turns and a so-called "auction down" begins.

One example is the property of pop singer Michael Jackson. The 1110-hectare "Neverland" ranch was sold far below value because it was on the market for a long time due to a lack of interested parties.

The original sale value was 100 million dollars. In the end, an American billionaire was able to buy the property for 22 million dollars (18 million euros).

See how much is being asked on average for similar properties in your area. If you are unsure about the pricing, get an expert opinion from a court appraiser in Tyrol. Ideally, he or she is certified in the field of commercial and industrial property valuation. With the help of his price proposal you can avoid expensive mistakes.

Also, don't forget that property gains tax may apply when you sell a commercial property. I have described in detail how much this is and what else you need to bear in mind about taxes in another blog post on the subject of taxes when selling a commercial property.

Step 4: Spruce up your property.

Cobwebs, rubbish, damage or old furniture? That doesn't have to be the case. Before you start marketing the property and asking the first prospective buyers for viewings, do a thorough cleaning. Remove old office furniture and repair obvious damage. This will enhance the value of your property.

Step 5: Take care of professional photos.

Show your commercial property in the best light with professionally taken pictures. Make sure you give potential buyers a complete view. Proper lighting also makes a significant difference, especially for warehouses that may be gloomy.

If you are not confident with the camera yourself, rely on a professional to take and edit the photos for you.

Step 6: Start marketing your property.

Once you have completed the preparations, you can start marketing the property. To do this, advertise your property for sale in newspapers and online portals.

You can find out which 3 platforms are particularly profitable in Tyrol in a separate blog post "Haus richtig inserieren: How to get good offers quickly". Even though this post refers to house sales, similar results can be expected when selling a commercial property.

In addition to these platforms, you should also take care of advertising throughout Austria and abroad in order to reach more interested parties. Expect high advertising costs here, sometimes in the four-digit range.

Step 7: Arrange viewing appointments.

Once you have found interested parties, fix the first appointments for viewings. During the viewings, answer the potential buyer's questions and emphasise the advantages of your property. Ask why the prospective buyer is dissatisfied with their current property and offer a solution with your property. During the conversation, you should also check the true intention to buy.

Step 8: Check the creditworthiness of the interested parties.

Does a prospective buyer seem trustworthy to you and would like to purchase the property? Then it is time to check their creditworthiness. After all, you really want to get the money for your commercial property. For the credit check, you can ask the prospective buyer himself for proof of creditworthiness. Normally he will provide you with this.

Or you can check the creditworthiness of the potential buyer online: There are credit agencies in Austria that collect data on companies or private individuals to assess creditworthiness. You can view this online and get an impression of the prospective buyer's financial situation.

Also, listen to your gut feeling - you will certainly not want to conclude a purchase contract with every interested party.

Step 9: Have a written, binding purchase offer prepared.

If you come to an agreement with the buyer, you should have a written, binding purchase offer drawn up. This should contain the essential points of the contract that represent your interests. These are a legal safeguard for you as the seller.

Some preliminary contracts are very vaguely worded. If the buyer does not adhere to certain points of the preliminary contract, you as the seller can only file a lawsuit after the conclusion of the purchase contract. With a written, binding offer to purchase, you are protected in this respect and can also file a lawsuit in advance.

Step 10: Sign the purchase contract.

On the basis of this accepted purchase offer, a lawyer or notary draws up the purchase contract ready for entry in the land register. In most cases, the lawyer or notary is chosen by the buyer. The purchase contract then only needs to be signed by you.

If you follow these 10 steps, you should usually be able to sell your commercial property without much trouble. However, you should keep two things in mind:

1. Depending on the type of commercial property, it may take longer to find a suitable buyer. Warehouses are usually easy to sell, but hotels are more difficult.
2. You have to put a lot of time and money into the preparations. As mentioned, amounts in the four-digit range can be incurred just for advertising the property. Obtaining the necessary documents or preparing the exposé also takes time.

However, I can offer you a solution for both problems: If you sell your commercial property through an estate agent, you save a lot of time, money and thanks to the large estate agent network, potential buyers can be found more quickly.

Sell your commercial property in just 6 steps: A real estate agent makes it possible!

Step 1: Find a broker.

You can first search for an estate agent online. Be sure to look at his or her references. These are, on the one hand, Google reviews or "testimonials" on the website. Secondly, you should look at which properties the agent has already sold. Does the agent perhaps only sell luxury properties or are there no sold properties on the site? Weigh up whether the agent is actually suitable for your sales situation.

In addition, the estate agent should be legally trained in order to be able to formulate a legally binding purchase offer. Ideally, he or she is also a court expert in the field of commercial or industrial property valuation. This will enable him to assess the value of your commercial property in line with the market.

Another plus point is the broker's professional experience: If he has many years of professional experience on the Tyrolean market, he can assess it better and can benefit from a large broker network.

Since some prospective buyers of commercial property in Tyrol are international business people, the real estate agent should be able to speak English. The real estate agent's website should also be available in English.

If you have a good impression of an estate agent, contact him. When you first contact him, give him some key data about your property. This will enable him to prepare for the first viewing of the property.

If he can convince you of his competence in the course of this, you give the broker the brokerage contract.

Step 2: Give the broker a power of attorney.

So that the real estate agent can collect all the necessary documents and check them with the building authority, you issue him with a power of attorney. Once he has gathered all the documents, the estate agent will prepare the exposé and the advertisements.

Step 3: Clean and declutter your commercial property.

You won't be spared this step even with an estate agent. Get the property in shape. Your estate agent will take care of the photos.

Step 4: Check the exposé and the advertisements.

Request an exposé from the real estate agent and check the accuracy of the information again. Do the same with the advertisements on the real estate agent's website and the real estate platforms. The costs for the advertisement are borne by the estate agent at his own risk. In the event of success - i.e. when your commercial property is sold - he will get these expenses back in the form of the broker's commission.

The subsequent steps, such as viewings, checking the intention to purchase and creditworthiness, are the responsibility of the estate agent.

Step 5: Check the written offer to purchase.

Your estate agent prepares a limited, written purchase offer with the most important points for the purchase contract. All you have to do is check it.

Step 6: Sign the purchase contract.

You sign the purchase contract. If you wish, your estate agent will accompany you to this appointment to take a final look at the contract and answer any questions you may have.

Selling commercial property: These 5 advantages come with a broker

Advantage #1: Massive time saving

Selling your commercial property with an estate agent simplifies the selling process massively for you. You don't have to fight your way through legal documents or invest time in obtaining all the documents. Especially when dealing with the authorities, the waiting time is often long and the opening hours of the offices are difficult to combine with your own working day.

Advantage #2: Correct price estimation

A real estate agent in Tyrol with many years of professional experience knows the situation on the Tyrolean real estate market and helps you to estimate a fair market price for your commercial property. In this way, you prevent your property from being on the market for a long time and real estate professionals from depressing the price. After all, you don't want to give money away.

Advantage #3: Use broker networks to increase reach

If you sell through an estate agent, you can use their network. Of course, there is a certain amount of competition between estate agents on the property market in Tyrol, but there is still a certain willingness to help.

In the course of a so-called brokerage syndicate business, brokers work together to connect sellers with suitable buyers. This increases your chances of selling.

Advantage #4: Sales price in line with the market

An estate agent is committed to getting you the amount of money you deserve for your property. Selling below value is not an option.

Advantage #5: No costs for the application

If you entrust an estate agent with the sale of your commercial property, there are no application costs for you. The estate agent will take over these - sometimes very high - costs.

Our offer for the sale of your commercial property

I hope my guide can help you sell your commercial property quickly and easily. You are of course free to take on the sale yourself or to consult a professional. Depending on how much time and money you want to invest in preparing for the sale, it may make sense to have an estate agent assist you.

At Arealita we offer you many years of experience as a real estate agent in Tyrol with legal expertise. In addition, I have been working as a Tyrolean court expert of real estate for many years and have specialised in the valuation of commercially or industrially used properties.

You want to get a first impression of us? Contact us at any time via the contact form, by email or phone(+ 43 512 580 242) and make an appointment for a free initial consultation. We will take a look at your commercial property and would be happy to assist you with the sale.

With kind regards

Yours, Bernhard Großruck

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