Selling commercial property comes with many different routes to sale, a mass of jargon and different fees that can all get in the way of you getting the sale you need. When considering legal requirements, local property values and what buyers want in the market it is not always as simple as it should be.
Simplicity when selling commercial property is our mission, and this guide will take you through what you need to consider and explain the jargon to help you make the right decisions for your commercial property sale.
Before you sell
The key to selling a commercial property is to be prepared. Getting everything in order before you start the process will ensure a smoother and more lucrative sale. At the most basic level, this means making sure the property presents well, is in good condition and all clutter and mess are removed. Keep the property in the kind of state you would want to see it in if you were looking to buy.
Create a buyer pack
You need to consider what the buyer will be after with your property and provide them with all the relevant information. It is worth creating a "buyer pack" (like a brochure) to provide all the information and do a lot of the sales work for you.
This is also a good way to inform prospective buyers about the status of all the legal requirements for the building. This is what you should include in a buyer pack:
- Details of the property size and facilities
- Lawful use certificates, planning permissions and use classes
- Commercial energy performance certificate (EPC)
- Details on stamp duty, business rates and other costs that the buyer will have to pay
- Asbestos survey (if necessary)
For more guidance on what information to include for a prospective buy speak to your commercial property agent/surveyor if using one.
What are my sales options?
There are a few different options to sell your commercial property – you could sell through a commercial property agent, via a commercial property auction or even go it alone and sell it yourself.
Commercial property auctions are good if you are looking for a quick sale and they often guarantee a quick transition from the hammer going down to the exchange of contracts.
What fees and costs will I need to consider?
As well as the obvious costs of selling a property there are others that you may not have considered. These are the costs and fees to expect during the sale:
- Commercial agent fees and commission – Commercial property agents have traditionally charged between 4% and 10% of the overall sale price because that's the way it has always been done! Of course, you could always sell your property commission free with us.
- Solicitor fees – you’ll need to pay a fee to a solicitor for conveyancing.
- Mortgage redemption fee – if you pay off your commercial property mortgage early you might be liable to pay a redemption fee.
- Capital Gains Tax – if are selling an investment property you might have to pay Capital Gains
- Mortgage arrangement fees – it might not be possible to transfer your existing mortgage to a new lender. If you have to arrange a new mortgage you can expect to pay a mortgage arrangement fee.
- Removal costs
With all these costs it is worth doing your research and shopping around for the best deal.
Working with commercial property agents and solicitors
If you choose to sell through a commercial property agent it is recommended to select one that is a member of an accredited trade body such as the Royal Institution of Chartered Surveyors (RICS). Agents will provide you with a detailed valuation based on their industry knowledge and then start to market your property.
All good agents are covered by personal insurances that will cover any damages you will suffer because of poor advice.
You will also need to instruct a solicitor to be responsible for the legal processes of your commercial property sale. This includes arranging deposits, overseeing the exchange of contracts, confirming the transfer of funds and providing you with advice throughout the process.
Marketing your property
Whether you are using an agent to market your property or doing it yourself, it is important to understand what the properties main selling points are and communicate them effectively. Make sure that whoever is doing the marketing knows exactly what you want to say.
Provide all the relevant information with quality photographs of the property.
Completing the sale
Any offers your commercial agent received they are required by law to inform you. They will be able to formally advise you on them and help you decide on the best option.
If you are not using an agent, take into consideration each offer and match it to what you are willing to accept. This should help you work out if the offer is a good one:
- What is the buyer’s financial position?
- Do they have a mortgage or are they a cash buyer?
- Do they have a mortgage in place?
On accepting an offer, a draft Sale Agreement will be drawn up for both parties to agree to.
Once the contracts are exchanged the buyer will pay deposits to the solicitor and a completion date will be confirmed. When everything is completed the mortgage lender will release the rest of the funds to the solicitor and the sale is complete. Although this is the standard commercial property sale process it is worth noting that all sales are different depending on the nature of the sale.