This post originally appeared on Saskedge Blog and is republished with permission. Find out how to syndicate your content with theBrokerList.
There is nothing worse than putting a transaction together that gets mired in a lengthy conditional period with no end in sight.
Whether it’s a court ordered sale or a deal that continually seems to get extended, time kills deals that take too long.
Fatal error: not preparing a property for sale
We counsel sellers that preparing due diligence ahead of listing a property will speed up a possible sale transaction.
Contracting reports from third parties like environmental engineers or surveyor’s provide several benefits.
Not only is the seller in the driver’s seat to control those timelines in advance, but it can confirm any possible hurdles to a sale.
In investment sales it’s important as agents that we’ve collected all financial information and any relevant reporting that a buyer may ask for.
We should not be scrambling or waiting on that information during the due diligence period.
Identifying building conditions prior to a sale is not only honest but can save time.
A buyer should be prepared to buy as is. If they discover issues on their own, they may come back for last minute re-negotiations.
Negotiations critical to a sale
If there is a lease renewal that is critical to the sale of a property, there is good reason to start that conversation prior to tying up a sale.
It’s not uncommon for a condition to appear regarding a lease renewal, which is totally acceptable.
But that said, laying out the expectations of all parties involved prior to contracting the sale can save a lot of time.
What if the tenant is not prepared for an increase in rent or occupancy costs? What if they have outstanding issues they want addressed prior to signing off a renewal?
As a buyer, it’s riskier to buy an investment property without long term leases in place.
Starting that negotiation with tenants where no relationship exists, while under a time crunch, is a less than ideal situation.
I have seen multiple examples of buyers whose feelings have changed during the course of a transaction.
Legally and morally speaking, everyone is obligated to do their part to complete the transaction.
But conditional periods can bring cooling off that lessens a buyers’ desire to take on the project.
I’m not advocating for us as agents to slam deals together in a hurry. That’s completely irresponsible!
But I am saying, the longer a deal sits and percolates the more opportunity exists for it to go sideways.
Sellers who bring a property to market with the most due diligence they can reasonably complete on their own will almost certainly be positioning themselves for a quicker, cleaner sale.
Posted by Kelly Macsymic
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