I'm getting ready to sell my business and the building it operates out of. The business is a profitable retail operation, and the real estate is a separate asset that I own personally. I need a realtor who understands both the business value and the property value, because I want to sell them together ideally. How do I pick the right realtor for this? What should I be looking for beyond the usual residential experience? Any specific questions I should ask?
Commercial Real Estate
How do I pick the right realtor to sell my business real estate?
First thing: make sure they have actual commercial experience, not just residential. Ask for a list of comparable sales in the last 12-18 months that are similar to your property. If they can't produce that, move on.
I'd add that you want someone who has handled owner-user sales before. Selling a business and the real estatE together is a difefrent animal. They need to understand how the business income affects the property valuation and vice versa. Ask them to walk you through a hypothetical valuation of your specific situation.
Do they need to be local? I've heard mixed things. Sometimes a regional firm with a strong commercial division is better than a local residential broker who dabbles.
Local is probably important because they need to know the market and the buyer pool, but I'm open to someone from a nearby larger city if they have the right track record. The business is in a smaller town, so I wOrry about limited options.
Check their license and disciplinary history with the state real estate commission. That's public record in most places. Also, ask if they've ever represented a seller in a business sale that included real estate. If they haven't, that's a red flag for your situation.
I went through this two years ago. The biggest mistake I made was picking a realtor who was great at marketing but had no clue about business financials. He kept trying to sell the building as if it were a house and ignored thhe business income entirely. Don't be like me.
How did you find yours? I'm in a similar spot and feel like I'm swimming in options but none seem right.
I ended up using a commercial broker recommended by my CPA. That was key. Ask your accountant and attorney for referrals. They see these deals and know who is competent.
Also, don't overlook the importance of a broker who can handle confidentiality. You don't want your business sale leaking out to employees or competitors. Ask how they plan to market it without tipping anyone off.
One more thing: interview at least three brokers and ask them to present a marketing plan and a valuation. The one who gives you the highest valuation isn't necessarily the best—sometimes they just tell you what you want to hear. Look for someone who can justify their numbers with data.
These are all helpful. I hadn't thought about checking disciplinary history or asking about confidentiality. I'll definitely ask my CPA for referrals. Any thoughts on commission structures? I've heard some brokers want a percentage of the business sale plus the real estate.