By Matt Halper, Kiser Group
Real estate is a common asset a person can inherit. While most people may think of a house, it can even be an apartment building. An investment property such as a multifamily asset is not necessarily an armchair investment, and tenant complaints may not be something you want to deal with, so selling the building may be your preferred choice in the estate.
So – What should you do with an apartment building you’ve inherited and don’t want?
Step 1: Value the Property for Sale
An appraisal had to have been conducted as part of the valuation of the estate. Now that you hold title to the real estate, you need to know the market value of the property. An appraisal isn’t the same thing as getting a professional opinion of value if you were to sell it.
You need a professional commercial real estate broker to value the building.
Step 2: Research Brokers
You’re new to the world of commercial real estate, so where to start? Commercial real estate brokers are different than residential real estate agents in many ways. What you are hoping to find is a professional with local market knowledge and one you trust. The executor of the estate and/or the estate attorney may have specific commercial real estate brokers in their network to refer. Of course, an online search engine is a common place to find brokers with a local presence. A broker should not be selected solely because they gave you the highest valuation of your building. There are many other important elements to consider.
Here are a couple steps that could be helpful for selecting/searching for a commercial real estate broker:
- Define the asset class of the building. Is it Multifamily (apartments), Office, Retail, or something else? What brokers are active in that type of property
- Where is the property located? In a city, neighborhood or suburb? What brokers are active in that area?
- Speak with your broker about microeconomic trends. For example, is the property in an emerging market? It could be in your best interest to hold on to it and reap the rewards of appreciation in a few years.
- Meet with a couple brokers to measure their local market knowledge, professionalism, and trust and get sale analyses from them (you should never pay to have a valuation).
Remember real estate is extremely local, no matter where you live, so don’t necessarily pick a brokerage that you are familiar with, pick the one that has the marketing strategy to sell the property that best meets your goals, whether that is the most money, less hassle, fastest, etc. A brokerage firm like Kiser Group covers Chicagoland, and individual brokers have specific focus areas, types and sizes of apartment buildings that they specialize in.
Now that you have a realistic estimate of value on the property, you decide whether you want to sell or hold it.
Step 3: If You Decide You Want to Sell…Select a Broker & Sell the Property
The “typical” time to sell isn’t typical because every property, buyer and seller is different. The broker you select will market the property on your behalf, present offers and bring the transaction to a close. Similar to selling a home, there are multiple steps that need to be completed: marketing, showings, offers, escrow, and finally closing.
If you find yourself a landlord by inheritance and are looking for options as a next step, contact Kiser Group for a complimentary consultation and market valuation.