In commercial real estate agency it is common for the property owner to put you under some pressure to accept their price or rental in a listing situation. If you do that, you will commonly finish up with a listing that is over the mark or could contain errors. A listing with problems will not sell or rent well and can be on your books for a long time.
The key facts should always be known when you list commercial property. Investigate everything before you comment on price or rent. For example:
- A lease in a property may be a positive or negative when it comes to the potential sale, and you will need to look at the lease to understand those facts before the listing is marketed.
- The property itself may have issues of ownership or orders and notices that can impact the sale process. In all cases you should do a title search and a detailed property search at the local council before you complete the listing.
- The improvements in a property may have compliance issues with the building codes, or orders may have been issued on the property for alterations to certain issues.
So the list can go on. Asking questions of the property owner is a good thing, but sometimes they do not have all the answers or know about the issues. For that reason you should ask for more time in the listing process.
Here is a checklist that can help you with some of the bigger concerns when listing a commercial or retail property today:
- Get copies of the leases for the property and in the property so you know what impact they can have on the sale or lease process. Look at the critical dates in the leases in case they require response or action before the marketing of the property.
- Notices and orders may have been issued on the property by the local council or building authority. The client should normally know about these things however a checking process at the local council will be a wise move.
- Boundary issues relating to the borders between adjacent properties should be checked. That may require you to get a copy of the latest survey plans that apply to the area. If any questions appear regards boundaries, then the client should get a survey check done as required.
- Property usage currently should comply with the existing tenancy or ownership. Property usage will or should comply with the requirements set out in the local zoning planning regulations.
- Tenant lease issues can vary enormously from property to property and tenancy to tenancy. This says that you should be comfortable in reading and interpreting lease documentation. When in doubt see a good solicitor that understands the property type and the leasing process.
- Outgoings and other property operating expenses will vary from property to property, although they should compare on average to other properties of similar type and size. This is where your local property knowledge is quite important in the listing phase.
- Improvements in the property should be checked for relevance to the target market, building code compliance, and existing property usage. Look for any improvements that could require upgrade or refurbishment prior to the marketing process commencing.
This list can be expanded given the property location, the property type, and the improvements. It is best to have a questioning approach to the listing process so you can get issues and hurdles out of the way prior to the marketing process.
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