Selling commercial property: how to negotiate the price
Negotiating begins with substantiation
A professional buyer rarely opens with "I think that is too expensive". They open with a calculation. If you want to counter that, you need your own calculation. For let property, that is the annual rent divided by a market-conform initial yield, adjusted for vacancy risk and overdue maintenance. For vacant property, it is the value after investment minus that investment minus the buyer's risk.
Anyone who comes to the table with such a substantiation shifts the conversation from opinions to assumptions. And assumptions can be discussed.
The five standard arguments for price reductions
They almost always come up. Prepare for them:
- Overdue maintenance. Counter with quotes. A buyer who mentions 60,000 euros while you have a quote for 22,000 euros loses that point.
- Energy label. For offices, a C label is mandatory for office use. Know what a label jump costs for your building and have that figure ready.
- Vacancy risk. Substantiate with the rental history of your own building: how quickly was a departed tenant replaced?
- Zoning and permits. Check the zoning plan yourself via the Omgevingsloket so the buyer cannot price in uncertainty that isn't there.
- Soil and asbestos. A recent report takes this argument completely off the table.
Terms are sometimes worth more than price
Sellers focus on the amount, while the conditions determine the net outcome just as much:
- Delivery date. If you can choose when you deliver, you save on ongoing costs or gain time for your own move.
- Conditions precedent. An offer of 900,000 euros without a financing condition can be worth more than 940,000 euros with an eight-week condition and a realistic chance of falling through.
- State of delivery. Do you have to deliver the building empty and broom-clean, or does the buyer take everything over including inventory and overdue maintenance? That often saves thousands of euros in clearance costs.
- Warranties and indemnities. The less you can be held liable for afterwards, the better you sleep.
- Deposit or bank guarantee. The standard is ten per cent of the purchase price; do not omit this.
Three practical negotiating tips
Never give a bottom price first. State your asking price with substantiation and let the buyer show their calculation. The difference between those two sums is exactly what the conversation is about.
Negotiate as one package, not on individual points. Otherwise, you win on price and lose all the conditions.
Put everything in writing immediately. Agreements that are not in the purchase agreement do not exist at the notary.
How we do it
We buy directly and work with one substantiated bid instead of an opening bid that is increased later. During an inspection, we walk through the points above together, and you see which items we price in and why. If you disagree with something and have a quote or report that shows otherwise, we adjust the calculation. That is not a tactic, that is just arithmetic.
More background on valuation can be found on commercial property valuation and value and about our method on commercial property buyer.