Buying an office building can be a terrific investment and provide many financial advantages. But if you operate your CPA practice in a building you own, and you decide to sell your firm, real estate ownership introduces additional issues into the selling process. Here are a few things to keep in mind if you find yourself in this situation.
Owner’s Pride and its Pitfalls
We have seen deals fall apart because of real estate owned by the seller, which is often insignificant compared to the value of the practice. Why does this happen? Sometimes it comes down to the owner’s pride.
People can develop deep emotional attachments to their real estate. You probably remember first seeing the building, deciding it was the place for you, going through all the effort to acquire it and fix it up for your needs. Add in years of memories of what transpired inside your office – the business deals, relationships and friendships, proud moments of accomplishment, picking yourself up again when things didn’t go your way. What somebody else sees as an ordinary building has grown into a vibrant, living slice of your personal history.
You must be realistic and objective about the true condition and value of the property. Step back and look at the location. Is it highly desirable? Or do you have the nicest property in a neighborhood that’s gone downhill? If conditions have changed in the area, it can affect the value of your property.
Since CPA practices are built largely on the intangible relationships between employees and clients, SBA lenders like the tangibility of real estate to partially secure the loan. This can mean better terms for the buyer compared to deals with no real estate, such as a longer time to repay the loan and lower monthly payments.
Remember What’s Important
No matter how much you love your building, focus on the value of your CPA practice. You can sell a building to anyone. You can only sell your practice to a CPA who is highly qualified and who is willing to pay you the price and terms that you are looking for. Maximizing the sales price and amount of cash at closing are the most important aspects when selling your firm. Don’t lose an otherwise good buyer by trying to require the sale of your building.
How do you objectively determine the value of your building? Get at least one independent appraisal done.
Accounting Broker is not a licensed real estate broker. If you desire to sell your building we do not promote or negotiate the sale of real estate. We do not provide advice related to real estate or take any commission on the sale of a building. Accounting Broker Acquisition Group has a singular goal that we achieve with our sellers: We will maximize the value of the sale of your accounting practice and provide you with a high cash-at-closing deal. The sale of your accounting practice will be comprised of fixed assets and intangible assets. You can then negotiate a separate sale of the real estate with that buyer that can close on or near the same day.
Accounting Broker Acquisition Group is the only national business brokerage of its type comprised 100-percent of brokers who are CPAs with significant “Big Four” merger and acquisition experience. Contact us today so we can help you navigate the complicated issues of selling your CPA practice.