Selling Guide: New England Inns & Bed and Breakfasts

Getting Ready to Sell Your Property

Start by Creating a “Someday I Will Sell” file

A “Someday I Will Sell” file should contain everything that brokers have sent you over the years, names of potential buyers you’ve run into or thought about, press clippings and samples of your marketing materials, copies of your last three years financials and any industry information on trends in your marketplace.

This is not a complete “due diligence” file that the broker and buyer will eventually build, but it’s a start. It’s actually all you need – the ideal file – for that first visit with the broker.

Every owner receives letters and brochures from brokers. Save them! Even if you think your sale is several years off, keep their letters, cards and brochures. When it finally comes time to evaluate your alternative choices for a broker, you’ll have a more complete picture of what they’ve said before.

It’s not unusual to have people tell you they’ve always wanted a property like yours. When you hear that, capture their name and find out what’s really on their minds. Keep that contact and a record of the conversation. They may never buy your property, but just remembering what they said gives you good food for thought.

Save that marketing material! Publicity you’ve received, ads you’ve run and photos of the real estate. We’re not looking for a scrapbook here, but anything that will help a broker or potential buyer understand why your property is attractive.

Press clippings help tell your story. Your flyers, brochures, newsletters, mailings, and copies of ads you’ve run complete the picture.

Make extra copies of your Federal income tax return each year for this separate file. Brokers and buyers always want the last three years. Keep a computerized occupancy history and furnishings list up–to–date in this file. If you have budgets or special analyses of your revenues (like sales by month), keep that here too.

Eventually, brokers and buyers will need much more financial information than just these few items. But, most of what they will need later will be current performance data. Keep information on the historic financial trends of the property in this file.

See A Broker BEFORE You’re Ready

If you’ve gotten this far into this article, you probably are seriously thinking about selling. But, when is the right time to sell? And, when should you go see your broker?

The answers are alarmingly simple. The best time to sell is when you are ready. The best time to see the broker is before you’re ready – about two years before!

Owners sell for lifestyle reasons, when the going gets rough, when they run out of money and/or when a new opportunity beckons. Buyers buy for lifestyle reasons, when their previous occupation is no longer satisfying, when they are flush with money and/or when there are good properties for sale that appeal uniquely to them.

There is no “season” or “ideal economy” for this: May is just as good as December and sales occur in boom times as well as in recessions. Qualified buyers out–number sellers nationally (and in Maine) by about 3 to 1. So, many qualified buyers are always out there in every season, and in any economy.

Why go see your broker two years before? Because it can take a year to sell your business! The time it takes you to choose a broker and get ready to sell might consume a few months. Negotiations, bank financing and closing take time, too!