Question : What are the steps that I need to do if I’m thinking about selling my building?

A number of steps need to be taken in order to make sure that the sale of your building is a smooth process. A summary of these steps are written below.

Selling my multi-unit building summary of steps

1.       Get a market evaluation of my property to find out a realistic selling range in today’s market.

• The real estate market is very dynamic
• Many macro and micro economic factors influence the real estate market
• The demand for investment properties varies depending on the surrounding economic conditions
• Real estate values are highly dependent on the lending rates, and the lender’s ease of lending or not for certain types of real estate.

2.       Verify with my accountant what my property’s book value is, and what would be my capital gains implications.

• Countries/states/provinces have different capital gains laws and regulations. Hire a consultant that understands the tax implications in your immediate area.

3.       List my property

• To generate the fair market value for your property, it has to be exposed to the right investors
• Different investors have different investment criteria
• A professional real estate broker/agent will know who the best buyer for each property is, this way generating a fair selling price for the vendor.
• A seller has nothing to gain and everything to lose in selling their property directly to a buyer without the help of a professional agent/broker

4.       Receive an acceptable offer for my property

• This step varies depending on multiple factors (see the link “what affects the selling price of my building?”)
• In any market, good or bad, each property has a fair selling price, an acceptable offer is an offer that the vendor is willing to accept
• Some vendors may make price as their only deciding factor, others may have other conditions that would be more important for them (for example an offer giving the vendor 100% of the asking price in 3 years closing time, vs. one which is at 90% of the asking price closing in 30 days).

5.       Purchaser will perform their due diligence conditions.

This step varies depending on the offer, the purchaser, and the conditions that need to be fulfilled for a certain property. The typical conditions are:

• Building inspection for the physical components (such as condition of dwellings, heating apparatus, roof, boiler, foundation, bricks, windows, balconies…)
• Environmental inspection
• The financing condition (if applicable)
• Review of all income/expenses, including leases, taxes, insurance expenses.

6.       Verify with the notary if my certificate of location is up to date, if not order a new one (please see our useful links page for land surveyor coordinates)

• This is a very important step and must not be overlooked.

7.       Once the purchaser conditions have been removed, bring the property deeds (act of sale, act of loan, certificate of location), the leases, all the expense documents to the acting notary of the file.

8.       Perform the notarial closing

This is when the 2 parties sign the act of sale. The funds have to be in the notary’s trust account for the sale to occur, ie if there is a bank loan, the funds must be disbursed by the bank to the notary’s trust account. At the notarial signing all of the adjustments for expenses and revenues are also done.

9.            Vendor receives the funds

The funds are released to the vendor after registration of the sale by the notary. In the Province of Quebec market, this may be within 3 working days after the actual act of sale. These delays vary according to the provincial, state or country laws and customs. Confirm these delays with the notary in your area before bringing a file over to the notary for the closing.