Selling a commercial property usually starts with understanding exactly what you are selling and getting a realistic view of its value. From there, you can prepare the property and supporting information, decide how to market it, manage buyer enquiries, and consider offers. Once the terms are agreed, solicitors handle the legal work required to progress the transaction towards exchange and completion.
Every commercial property sale is different. A vacant shop, tenanted investment, office, industrial unit or mixed-use building may attract different buyers and need a different approach.
In this guide, we explain the main stages of selling commercial property in the North East, what you should prepare and the decisions you are likely to face along the way.
How do you sell a commercial property?
The exact process depends on the property and circumstances, but a commercial property sale will usually involve several key stages:
- Understand exactly what you are selling.
- Obtain a commercial property valuation.
- Prepare the property and relevant information.
- Decide how the property should be sold.
- Market it to suitable buyers.
- Manage enquiries and viewings.
- Consider offers and the buyer’s position.
- Agree on the main terms of the proposed sale.
- Instruct solicitors and progress the legal work.
- Exchange contracts and complete the transaction.
Preparing properly at the beginning can make the later stages easier. It also gives prospective buyers a clearer understanding of what they are considering before legal enquiries begin.
At Rook Matthews Sayer, our commercial team works with property owners across the North East. One of the first things we consider is not simply how a property can be advertised, but who is most likely to buy it and what will make the opportunity relevant to them. We manage commercial opportunities across the region, including property sales, lettings and business sales.
Start by understanding exactly what you are selling
Commercial property covers a wide range of buildings and investments.
You might be selling:
- An empty shop or retail unit.
- Offices.
- Industrial or warehouse premises.
- An owner-occupied building.
- A property with a commercial tenant already in place.
- A mixed-use property.
- Land or a development opportunity.
Understanding the asset matters because the likely buyer can change considerably.
An owner-occupier looking for premises for their own company may assess a building differently from an investor buying it for rental income. A developer could have different priorities again.
There is also an important distinction between selling a commercial property and selling the business that operates from it. The two can form part of the same wider transaction, but they are not automatically the same thing.
If you are selling the property itself, its valuation, marketing and buyer information should remain focused on the building, land, tenure and commercial opportunity.
You can find out more about the services we offer through our commercial property team.
How is a commercial property valued?
Commercial property valuation is not always as straightforward as looking at what a nearby building sold for.
Professional valuation can use different approaches depending on the asset and the purpose of the valuation. Factors that may affect the value of a commercial property include:
- Location.
- Property type.
- Size and layout.
- Condition.
- Current use.
- Relevant comparable transactions.
- Current buyer demand.
- Rental income where the property is an investment.
- Lease terms where a tenant is in place.
- Whether vacant possession will be available.
- Development or alternative-use potential where appropriate and subject to permission.
A realistic valuation is important.
Setting an asking price significantly above market support can discourage enquiries or make it harder to generate serious interest. The important point is to understand the evidence behind the valuation and how your property compares with the wider market.
Our approach is to look at the individual property, the market it sits within, and the buyers most likely to be interested before discussing how it should be positioned.
What should you do before putting a commercial property on the market?
Preparing to sell involves more than making the building look presentable.
There are two areas to think about: the property itself and the information buyers may need to make an informed decision.
Prepare the property for buyers
First impressions still matter in commercial property, but that does not mean every building requires major refurbishment before it can be marketed.
The right level of preparation depends on the property and the likely buyer.
It may be worth considering:
- Whether the property is clean and easy to inspect.
- Whether obvious minor maintenance issues should be addressed.
- Whether unnecessary clutter can be removed.
- How entrances and external areas appear.
- Whether buyers can easily access the important parts of the property during a viewing.
Before spending substantial sums on improvements, consider whether the work is genuinely likely to improve the property’s appeal to the people you expect to buy it.
An investor purchasing an occupied property may have very different priorities from a business looking for premises it can move into.
Prepare the information buyers may need
Commercial buyers may need considerably more information than the property’s address, floor area and asking price.
Depending on the property and transaction, this may include:
- Title and ownership information.
- Existing leases.
- Current rental information.
- Planning and use information.
- Business rates details.
- Service charges where relevant.
- Relevant property or maintenance records.
- An Energy Performance Certificate where required.
Most commercial premises need an EPC when they are sold or let, although certain exemptions apply. The exact documents needed will depend on the property and transaction, so speak to your solicitor about what should be prepared rather than treating any general checklist as exhaustive legal advice.
Can you sell a commercial property with tenants in place?
A commercial property does not necessarily need to be empty before it can be sold.
If a tenant is already in place, the existing lease and income may become an important part of the investment case for an investor.
They may want to understand matters such as:
- Current rent.
- Remaining lease term.
- Relevant lease provisions.
- Break clauses where applicable.
- Tenant information.
- Repair and maintenance responsibilities.
- Other terms that may affect the investment.
The buyer is therefore considering both the physical property and the income arrangements attached to it.
A vacant commercial property may appeal to a different audience. Potential buyers could include owner-occupiers, investors seeking a new tenant, or buyers considering another use for the property where appropriate.
If you have an existing commercial tenant, take legal advice before making decisions that could affect the tenancy. The lease and the circumstances of the individual property need to be properly considered.
How should commercial property be marketed?
Effective commercial property marketing is not simply about attracting the largest possible number of views.
The more useful question is:
Are the right buyers seeing the property, and do they have enough information to understand why it may suit them?
Depending on the property, marketing can include:
- Professional photography.
- Clear sales particulars.
- Floor plans where useful.
- Property portals.
- Existing buyer and investor databases.
- Direct approaches where appropriate.
- Local marketing.
- Sales boards.
- Online and social promotion.
- Following up on serious buyer enquiries.
We currently use professional photography, sales brochures, property portals, social media, sale boards, and our database of prospective purchasers and tenants to market commercial opportunities.
The information presented should also reflect the likely buyer.
An investor may want the rental position and lease terms made clear. An owner-occupier may place greater importance on layout, access, parking, location, and how well the premises meet the needs of their business.
Maximum exposure is not always the same as effective exposure. Commercial property marketing works best when the property is presented clearly to buyers who have a genuine reason to consider it.
You can see examples of properties currently being marketed through our commercial property sales listings.
Should you sell a commercial property privately or at auction?
There is more than one route to selling commercial property.
Which one is appropriate will depend on the property, the likely buyer market and what you want from the transaction.
Conventional commercial property sale
A conventional sale can provide flexibility around marketing, viewings, negotiations and the terms agreed with a buyer.
It can work well when the property needs to be presented to a defined market, and there is value in allowing prospective purchasers to view, ask questions and negotiate before a sale is agreed.
Commercial property auction
An auction is another route that may be appropriate for certain commercial properties, investments or land.
It follows a different sales process and should be considered in relation to the individual property rather than assumed to be automatically better or quicker.
Factors to weigh up can include:
- Property type.
- Likely buyer market.
- Your preferred timetable.
- Pricing strategy.
- The condition and circumstances of the asset.
We can discuss the different sales routes with you and explain whether an auction could be worth considering alongside conventional marketing. Read more about our property auction service if you would like to understand that route in more detail.
What happens during commercial property viewings?
Commercial property viewings can involve more detailed questions than just whether someone likes the building’s appearance.
Different buyers will look at the property in different ways.
An owner-occupier may focus on:
- Layout.
- Access.
- Parking or loading.
- Condition.
- Storage.
- Visibility.
- Suitability for their intended use.
An investment buyer may be more interested in:
- Rental income.
- Tenant information.
- Lease terms.
- Property condition.
- Future letting considerations.
Depending on the property, buyers may also ask about rates, service charges, utilities, access arrangements or occupational agreements.
You do not need to have an immediate answer to every technical or legal question during a viewing. The important thing is that genuine enquiries are recorded, followed up and directed to the correct person where professional advice is required.
Viewings also provide useful feedback.
If several potential buyers raise the same concern, it may indicate that something needs to be explained more clearly, addressed where practical, or reflected in how the property is being marketed.
Our commercial team can manage enquiries, arrange viewings, and report offers clearly as part of the sales process.
How should you assess an offer on a commercial property?
The highest headline figure is not automatically the strongest offer.
Price is clearly important, but it is sensible to consider the buyer’s broader position and any conditions attached to their proposal.
Points to consider may include:
- How the buyer plans to fund the purchase.
- Whether finance still needs to be arranged.
- Conditions attached to the offer.
- The proposed timetable.
- Whether the purchase depends on another transaction.
- The amount of due diligence required.
- How well placed the buyer appears to be to proceed.
A well-prepared buyer offering a single figure may sometimes merit careful comparison with a higher proposal that carries greater uncertainty or significant conditions.
Ultimately, the decision is yours. Our role is to ensure offers are communicated clearly so you can consider both the price and the broader commercial position.
What happens after you accept an offer?
Once the main points of a proposed transaction have been agreed, they may be recorded in heads of terms.
Heads of terms set out the principal commercial points agreed between the parties. The transaction may then broadly progress through:
Offer agreed → heads of terms where appropriate → solicitors instructed → enquiries and due diligence → contract → exchange → completion
Your solicitor will advise you on the legal requirements and deal with the legal documentation.
As commercial agents, we can remain involved while that work progresses. This can include facilitating communication between parties, tracking commercial points, and ensuring relevant questions reach the right people.
If you want to understand the transaction from the purchaser’s perspective too, read our guide to buying commercial property in the North East.
How long does it take to sell a commercial property?
There is no fixed timescale for every commercial property sale.
The time needed can vary depending on the property, the buyer, and the complexity of the transaction.
Factors that can affect progress include:
- Asking price.
- Buyer demand.
- Property type.
- The buyer’s funding.
- Existing tenancy arrangements.
- Legal enquiries.
- Title or property issues.
- Information that still needs to be obtained.
- How quickly the various parties respond.
Preparing information before a buyer is found can help avoid some preventable delays, but it would be unrealistic to guarantee that every commercial transaction will be completed within the same number of weeks.
If timing is an important part of your decision to sell, tell us at the beginning. We can then take that into account when discussing the marketing strategy and considering the position of prospective buyers.
What does it cost to sell commercial property?
The cost of selling depends on the property and how the transaction is structured.
Potential costs can include:
- Commercial agent’s fees.
- Solicitor’s fees.
- EPC or other property documentation where required.
- Marketing costs depending on the agreement.
- Professional or survey costs where needed.
- Costs relating to existing borrowing.
- Tax liabilities depending on your circumstances.
Tax needs particular care because it depends on factors such as who owns the asset and how it is held.
For that reason, take suitable tax or accountancy advice based on your own circumstances rather than relying on general property guidance.
It is also worth asking for expected professional and selling costs to be explained before you proceed, so that you understand the likely financial position beyond the headline sale price.
How can you make selling a commercial property easier?
A commercial sale may involve several people and a fair amount of information, but some preparation can make it easier to manage.
Start with a realistic valuation
Understand how the property is being assessed and which buyers are likely to be interested.
Prepare key information early
Try not to wait until a serious buyer appears before locating leases, EPC information or important property records.
Be clear about your priorities
If timing, certainty, price or another issue matters particularly strongly to you, make that clear from the start.
Understand the tenancy position
Where a commercial tenant is in place, ensure relevant lease and rental information is available for your professional advisers.
Choose a sales route that suits the property
Conventional marketing and auction offer different approaches. Your circumstances and the individual asset should shape the decision.
Respond promptly to serious enquiries
Commercial sales often involve agents, solicitors, surveyors, lenders and other advisers. Good communication helps avoid unnecessary hold-ups.
Look beyond the headline price
Consider the buyer’s overall position and ability to proceed, as well as the offer itself.
Use advisers who understand commercial property
Commercial sales have different valuation, leasing, due diligence, and legal considerations than typical residential transactions.
Selling commercial property in the North East with RMS
If you are thinking, “I want to sell my commercial property, but I’m not sure where to start,” a sensible first step is to understand the property, its likely market and what it may be worth.
Our commercial team is based in Newcastle and works with owners across the North East. We can visit your property, discuss its current market position, and provide a commercial valuation before you decide how to proceed.
We can also help with the next stages, including marketing, buyer enquiries, viewings, offers and communication as the transaction progresses. Our commercial team currently has more than 40 years of combined experience advising buyers and sellers of businesses and commercial property, and RMS Commercial states that it is a member of RICS and The Property Ombudsman.
You do not need to have all the answers before speaking to us. Understanding what you own, why you are considering selling, and what matters most to you gives us a useful starting point.
Thinking about selling? Arrange a commercial property valuation or speak to our commercial team about your property and what happens next.