Sell commercial property without a realtor's full commission

How to sell commercial property yourself, step by step

Selling a commercial property yourself follows the same path as with an agent, minus the listing commission: price it, prepare the documents buyers will ask for, get it in front of buyers' agents, then negotiate and close with a lawyer. These are the steps:

1. Hire a commercial real estate lawyer first. They'll review offers, handle conditions and close the sale.
2. Price it from evidence. Recent sales of similar properties, the income it earns (for a tenanted building, the net operating income), or an appraisal.
3. Gather the documents. The deed and PIN, the tax bill and MPAC assessment, the zoning, surveys and plans, current leases and the rent roll, and any building or environmental reports you have.
4. List it on MLS®. Choose Commercial for Sale or Commercial for Lease when you start your listing; we enter it on the MLS® System and it's sent on to realtor.ca.
5. Handle showings and offers. Buyers' agents book showings with you; offers come to you, usually on the OREA Agreement of Purchase and Sale – Commercial.
6. Work through conditions and close. Financing, inspections, environmental reviews and lease reviews are common; your lawyer closes and pays the co-operating commission from the proceeds.

What "without a realtor" means with a flat fee listing

Only a registered brokerage can put a listing on the MLS® System, so "without a realtor" really means without a traditional listing agent. You sign a listing agreement with our licensed brokerage for a limited service, a mere posting: it enters and maintains your listing on the MLS® System and forwards showing requests and inquiries to you.

You're still the brokerage's client for that service. What you do yourself is the part a full-service agent would charge for: setting the price, showing the property, negotiating and signing with your lawyer's help. Buyers' agents still bring their clients, and they're paid the co-operating commission you set.

What a commercial sale listing needs

TRREB's commercial sale form asks for more than a home listing: the zoning, the areas, HST on the price and the building details for your Type. Our form shows only what your Type of property requires and flags anything missing before you sign. Have these ready before you start:

• Price, and whether HST applies to it (Yes, No or Included); the sale of commercial property is usually subject to HST, so ask your accountant first
• PIN and roll number (ARN), property taxes and the tax year
• Zoning and the Total Area, plus the office/apartment, retail or industrial areas that apply
• Type and Category (e.g. Industrial → Free Standing, Commercial Retail → Retail, Store W Apt/Office) and the Current or Best Use
• Possession timing and occupancy: vacant, owner-occupied, tenanted, or owner and tenant
• Building details your Type needs (shipping doors, clear height, elevator, parking, utilities), up to 40 photos, your ID and proof of ownership

How to price commercial property you sell yourself

Price a commercial property from evidence, not from what you paid or need: buyers and their lenders will check it. An owner-occupied building is usually priced from recent sales of similar properties nearby, per square foot of building or per acre of land. A tenanted building is usually priced on its income: the net operating income (rent minus the owner's operating costs) divided by the capitalization rate buyers expect for that kind of property.

As an illustration only: a building earning $60,000 a year in net operating income, at a 6% cap rate, works out to $1,000,000. A small change in the cap rate moves the price a lot, which is why many sellers pay for an appraisal before they list. Our cap rate calculator runs the numbers. Set a price you can defend with comparables or income, and expect buyers' agents to ask for the rent roll and the operating costs.

Selling a tenanted building

A commercial property with tenants usually sells with the leases in place: the buyer takes over as landlord and the leases continue. Buyers price it on the income, so the rent roll, the leases and the operating costs matter as much as the building.

Expect a buyer's offer to be conditional on reviewing the leases and, often, on tenant estoppel certificates (each tenant confirming its rent and terms). Mark the occupancy as tenanted, say how much of the space is leased in the description, and give showing instructions that respect your tenants' notice rights under their leases. Have your lawyer check the leases for any right of first refusal before you list.

What it costs to sell commercial property this way

The listing costs the same whatever the price: $69.99 a month, $99.99 for 2 months, $119.99 for 3, $149.99 for 6, or $239.99 for MAX, plus 13% HST. On top of that you offer a co-operating commission to the buyer's brokerage: a percentage of the price, a flat amount, or terms written out. It's never $0, and it's only paid if their agent brings the buyer who completes.

Your other costs are the ones every seller has: your lawyer, any reports you commission, and the mortgage discharge. How commercial commission is usually worked out, and an example: commercial real estate commission in Ontario.

Can a residential realtor sell commercial property?

Yes, in Ontario. A registrant's licence covers trading in real estate generally; RECO doesn't register agents separately for residential and commercial. But RECO's code of ethics expects conscientious and competent service, so a registrant shouldn't take on work they can't do well, and commercial deals involve income, zoning and lease questions that residential agents may rarely see.

That's why many owners pick an agent with commercial experience, or, if they already have the knowledge and a lawyer, list on a flat fee and handle the deal themselves. You can check any agent or brokerage on RECO's public register.

Is selling commercial property yourself right for you?

It suits owners who know their property and its numbers, have a lawyer and an accountant, and can talk to buyers' agents directly: an owner-user selling their own building, or a landlord selling one tenanted property.

It's a harder fit for a portfolio, a development site that needs a planning case, or a property you'd rather market quietly to a few investors. A full-service commercial agent is worth the commission then; see when a full-service agent is worth it. Leasing instead of selling? See list commercial property for lease.

Questions

What's included

• Your property on the MLS® System as a Commercial listing, through PropTx, which feeds TRREB and other Ontario boards
• Sent on to realtor.ca, where agents and their clients search commercial property
• The Type and Category you choose (Office, Commercial Retail, Industrial, Store W Apt/Office, Investment, Land, Farm) and the matching TRREB fields
• Up to 40 photos, your description, the price and the full property details
• Showing requests from buyers' agents sent straight to you, and realtor.ca inquiries forwarded to you
• Price, photo and detail changes while you're listed, plus the sold or leased update

Flat fee MLS® prices

Plus 13% HST on Ontario listings; no tax on Alberta listings. The monthly plan can be cancelled any time.

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