The obvious place to look for a commercial property to buy is online listings. The vast majority of properties for sale are listed online.
You can also find businesses that match your preferences – filtering by price, location and other variables – within seconds. So, if you want to buy a commercial property, you’d be foolish to overlook digital platforms like BusinessesForSale.com.
However, there is another route to explore: finding an owner with an unlisted property that is just what you’re looking for, then persuading them to sell to you at a price that suits both parties.
Even if the selling party often has no intention to sell at the outset, such off-market deals do happen. Though you may have to work fast and smart to get the deal done, you won’t have to compete with other buyers, so there’s less risk of paying an inflated price.
Why buyable businesses aren’t always listed
Put simply, the seller may not have decided to sell just yet – even if they would happily sell up if the price was right. Alternatively, if the owner is running a business in the premises, they may be wary of alerting competitors or customers to the sale, which might alarm them and damage relations and even trade.
However, a more discreet pathway to a sale could appeal. Perhaps the would-be vendor might believe that the exclusivity of an off-market sale might persuade buyers to pay a decent price.
The fact that the interested buyer has sought them out, rather than simply emailing an enquiry via an online listing, may also convince them of the buyer’s sincerity.
Finding off-market deals
If you’ve found a suitable property available for lease which would serve the needs of your business, it may be worth raising the question of a potential purchase during leasing discussions.
Signalling your interest is unlikely to do any harm – they can only say no. And if they do, you could lease the property in the meantime and revisit the proposition at a later date – circumstances change and people do sometimes change their mind.
Also, don’t underestimate the value of your own network when looking for a suitable unlisted property. If you hear whispers that certain premises meeting your requirements are about to go on the market, you could sound the owner out and put in an offer before they get round to posting the listing.
Or you might hear rumors of a potential foreclosure. If so, then again, the owner may be keen to sell, if sensitively approached.
Well-informed business brokers may have clients who would sell in certain circumstances. And if you’re very fortunate, you may find a broker with a hot, ‘pre-market’ property about to be advertised.
For these reasons, it’s worth outlining your interest in an off-market deal to several reputable brokers. They can then place you on a shortlist and alert you when something suitable becomes available.
Doing your homework
Finding suitable targets is only one part of the jigsaw. You will certainly need to be mindful of any zoning limitations.
For instance, if you are looking for business premises, then even if the relevant business use is permitted on the property, other restrictions – such as on signage or intensity of use – may make actually running the business impractical.
A vacant property may initially seem an attractive proposition. But why is the building empty?
It may be that others have tried to buy the site but uncovered too many drawbacks. Doing plenty of research is the only way to tell whether you’ve found a bargain or a potential liability.
Approaching the owner
Once you’ve identified a great prospect, you’ll need the support of skilled professionals to protect your interests and offer reassurance to the prospective seller. To show you mean business, you should get a lawyer to draft a letter of interest and generally guide your purchase strategy.
You may also need to line up a surveyor and various other specialists.
If all goes well, you won’t have to outbid rival bidders, thereby giving yourself a strong chance of securing a great deal.
Melanie Luff is an Online Journalist for BusinessesForSale.com, the market-leading directory of business opportunities from Dynamis. Melanie writes for all titles in the Dynamis Stable including PropertySales.com and FranchiseSales.com.