During any commercial real estate transaction, sellers, as well as buyers incur some costs due to the various requirements that need to be fulfilled during the transaction. In view of this, sellers of commercial properties might ask: what costs are involved in selling a commercial property?
What Costs Are Involved in Selling a Commercial Property?
The costs that are incurred by a seller while selling a commercial property include, but are not limited to appraisal fees, inspection and repair fees, agent commission fees, solicitor fees, transfer tax, and moving costs. The amount of money these fees would cost vary based on the property and the company hired to perform the services needed.
While the ultimate reason for selling a commercial property is to generate income, you would still be required to spend some amount of money due to some inevitable costs that pop up during the sales. Here is a breakdown of the costs that could be incurred while selling a commercial property:
Before deciding how much to set as the asking price for a commercial building, you first have to have a solid idea about its current value. Appraising your property before selling helps you know the estimated value of your property, hence reducing the chances of you underselling or setting an unrealistic asking price.
The best way to do this is by hiring the services of a real estate appraiser, which would no doubt cost you some money. The average cost for appraising commercial buildings is $4,000, while big buildings could cost as much as $15,000 or more.
Inspection and Repair Fees
While the inspection of a building’s condition, as well as renovation, is mostly left to buyers to carry out, sellers could also choose to be responsible for it. Inspecting a property before sales helps you to identify any existing issues, and making repairs not only increases the value of the property but also quickens the entire transaction.
Take note that inspection and renovations should only be carried out by professionals, who can be trusted to do a good job.
Agent Commission Fees
Real estate agents play a major role in the sales of commercial properties. They list your property, advertise it to the right audience, link you up with professionals that you might need to carry out other activities, broker the best deals, and generally ensure that the transaction goes smoothly from start to finish.
However, all of these do not come for free. Typically, real estate agents -listing agent and buyer’s agent- charge a particular percentage of the sales price of your property, which would be divided equally between both agents.
When looking for a real estate service to hire, make certain that you consider only professionals, such as Si Vales Valeo Real Estate, to guarantee the best deals for you, in regards to sales price and sales speed.
A commercial real estate transaction is a complex process and is best carried out with the assistance of a legal counsel. Your solicitor creates a legal framework for the transaction and keeps you protected from any legal issues that might arise. They also ensure smooth conveyancing.
The solicitor fee covers the amount of money your solicitor will charge for the services offered and will vary based on the complexities of the transaction process.
This is usually charged by the state or city within which the real estate transaction takes place. Before selling, you should find out the amount of money usually charged for each transaction, and make provisions to pay it during closing.
For example, in Ohio, sellers would pay 1% of the sales price of the property as a real property conveyance fee, and in Hamilton, Cincinnati, 2% of the sales price in thousands as permissive tax.
Before closing, you would need to move any equipment or furniture that you have from the property, provided they are not part of the sales deal. The cost of hiring a moving company to transport these equipment is another fee that you might have to pay.
How Much Do Solicitor Fees Cost on an Average?
Solicitor fees mostly cost about 0.5% – 1.25% of the property sales price. This price could vary based on the peculiarities of the transaction and could also be subject to negotiation.
How Long Would It Take To Sell My Commercial Property?
Acquiring the purchase and sale agreement of a commercial property could take a short while, like say a couple of weeks, or could extend over a long period, like say a year or more. Factors such as property price, property location, and market demand play a role in this.
Closing costs in real estate transactions are pretty much unavoidable. However, if you are looking to minimize the amount you pay in closing costs as a seller, you might want to consider hiring a realtor service such as Si Vales Valeo Real Estate to help negotiate the best prices for the services you need rendered.