Sadly, most real estate agents and brokers aren’t prepared for what can be the most important sale of their lives: the sale of their real estate business. Even if you locate a terrific buyer, there are a number of ways you can sabotage the success of your sale.
Your real estate business may not be as valuable as your house, but it may very well be your second most valuable asset if you position it properly. While you may believe that retirement is years away, you never know when there will be a family issue, spousal transfer, health, or other reasons for having to leave the business.
Planning now will not only result in you being prepared for a sale, it will also result in more income for many years to come. Once you locate the buyer, there are still several hurdles that you will face. Here are some of the pitfalls as well as what you can do to avoid them.
1. Entity or asset sale?
When you sell your real estate business, one of the most important decisions you will make will be whether you will be selling it as an entity sale or an asset sale. Each type of sale has both good and bad points. Before searching for a buyer, visit your accountant or tax attorney to determine what is required in each type of sale and which is best for you.