Before You Sell Your Commercial Real Estate For Sale By Owner (FSBO)

Introduction: Selling your commercial property is a significant decision, and it’s essential to approach it with careful consideration. While the idea of listing it as “For Sale By Owner” (FSBO) might seem enticing at first, there are several crucial factors to weigh before taking this route. In this blog, we’ll explore why enlisting the services of a qualified broker can often lead to a more successful and lucrative transaction, using a real-life example.

When selling your commercial property, finding the right price is paramount. Price it too high, and you risk deterring potential buyers, causing you property to go unsold. Price it too low, and you might leave money on the table, putting equity in the pocket of a buyer. A skilled broker can conduct a comprehensive market analysis (broker opinion of value) to determine the optimal listing price based on current market conditions, ensuring that you strike the right balance.

One common motivation for FSBO is the desire to save on commissions. However, as demonstrated in the real-life success story below, a broker can often help you net more from the sale than you would without their expertise. By leveraging their market knowledge and negotiation skills, brokers can often secure higher offers that offset their fees.

Listing your property as FSBO means you won’t have access to the extensive marketing resources and networks that experienced commercial real estate (CRE) brokers possess. A CRE broker’s marketing efforts can attract a broader pool of qualified buyers, increasing the likelihood of a successful sale.

When selling as FSBO, you may encounter numerous inquiries from potential buyers seeking seller financing. While this can be a viable option, it also carries considerable risks. One question you need to ask yourself is, why doesn’t this buyer want to, or can’t, use a traditional lender? CRE brokers can help you navigate the complexities of financing and ensure you secure the best deal while mitigating potential risks.

Selling a commercial property involves numerous intricate details, and a deal can fall apart for various reasons. A CRE broker’s role extends beyond marketing; they oversee the entire process, from initial listing to closing. Our role is to help ensure a smoother transaction, minimizing stress and complications for you.

Results: Real-life Success Story

A proactive, full service commercial real estate firm came across a FSBO listing for a flex space property. Flex space is a highly desirable property type. The owners listed the 4500 sf property for $925,000. The CRE firm knew the property was well underpriced. The firm sold a couple similar properties in the same area for a much higher price per square foot, so they knew immediately the owners could get more for their property. The Broker reached out to the owners to ask if he could be of assistance in selling their property. The owners only had the property listed on one social media site. The owners mentioned the only offers they were getting were offers that required seller financing.

The owners put their trust in the Broker after he learned the owners’ goals, explained his services and processes, and properly set expectations. Within one week the Broker had multiple offers. An offer of $1.2M was accepted, and closed roughly 30 days later. After all closing costs, including broker and co-broker commissions, the owners netted $1,108,500, or >$200,000 more than what they would have netted at their original asking price. That is if they would have even received a full price offer.

Financial Benefits: More Equity in Your Pocket, and Not The Buyer’s Pocket

The decision to work with a broker resulted in a significantly higher net profit for the property owner—a purchase price at least $275,000 more than if they had sold the property on their own. This substantial financial gain can have a profound impact on the owners’ retirement plans, which was their primary goal.

Conclusion: While the idea of selling your commercial property as FSBO might seem appealing, the real-life success story case illustrates the significant advantages of enlisting the services of a skilled CRE broker. By partnering with a broker, you can ensure that your property is priced correctly, marketed effectively, and that the transaction is expertly managed from start to finish. In the end, the financial benefits and peace of mind provided by a broker often far outweigh the initial desire to save on commissions.