{"id":4260,"date":"2014-01-11T13:00:00","date_gmt":"2014-01-11T18:00:00","guid":{"rendered":"https:\/\/www.wework.com\/creator\/?p=4260"},"modified":"2020-03-30T23:21:09","modified_gmt":"2020-03-31T03:21:09","slug":"ensure-successful-business-property-sale","status":"publish","type":"post","link":"https:\/\/www.wework.com\/ideas\/professional-development\/ensure-successful-business-property-sale","title":{"rendered":"How to ensure a successful business or property sale"},"content":{"rendered":"

Surprise, It\u2019s Not Only About The Price!<\/em><\/p>\n

Corporations are holding record levels of cash, interest rates are low and the housing market is rebounding. The result? Merger and acquisitions professionals are buying more businesses and high-end homes are selling faster — Silicon Valley had a 26 percent increase in sales of $1.5 million-and-up houses in the first half of last year.<\/p>\n

If you\u2019re considering selling a business or property in 2014 \u2013 while business is good and before mortgage rates climb \u2013 keep in mind: Focusing only on the price can short-change you in the long run.<\/p>\n

\u201cA lot of sellers are rushing to close the deal because they\u2019re worried about what may be around the corner,\u201d says attorney John Hartog of Hartog & Baer<\/a> Trust and Estate Law. \u201cMy first rule: Sell smart, not fast.\u201d<\/p>\n

Sales of commercial properties were up 11 percent in the third quarter of last year, notes wealth management advisor Haitham \u201cHutch\u201d Ashoo, CEO of Pillar Wealth Management<\/a>.<\/p>\n

\u201cThese sales can constitute a significant money event, so you have to consider how they may impact your future lifestyle needs,\u201d he says.<\/p>\n

Adds CPA Jim Kohles, chairman of RINA<\/a> accountancy corporation:<\/p>\n

\u201cAnd you have to factor in how the transaction will affect your tax position. A great sales price doesn\u2019t look so good if it costs you more in taxes.\u201d<\/p>\n

The three offer these tips for a successful business or residential property sale:<\/p>\n

1. Know the true value of your business<\/strong>! A surprising number of entrepreneurs have an unrealistic idea of what their business is worth, says attorney Hartog. He tells of a man who owned a large chain of fast-food franchises. \u201cHe told everyone he knew the business was worth $150 million. After he died \u2026 the business was sold for $35 million.\u201d That resulted in a drawn-out lawsuit by relatives of the man who accused the sellers of under-valuing the company. \u201cWhether you\u2019re selling a business or real estate, get it appraised,\u201d Hartog advises. \u201cIt may sound obvious, but I\u2019ve seen savvy business owners make big mistakes due to delusions of value.\u201d<\/p>\n

2. How confident are you that the transaction will help you maintain the lifestyle you want<\/strong>? Before their clients take one step toward moving forward on a significant sale, wealth managers Ashoo and his partner, Chris Snyder, analyze how it might affect them in the future. \u201cThis is a must-do step. You need to have confidence that this money event will help you maintain your lifestyle until you\u2019re in your 90s,\u201d Ashoo says. He and Snyder run the transaction through an economic simulation factoring in major world and financial events since 1925, then use the information to project its future effect on the client. \u201cIf we\u2019re not 75\u00a0to 90 percent confident that it will help them reach their goals and maintain their lifestyle, we advise the develop a Plan B — or not sell at all.\u201d<\/p>\n

3. The pre-tax price and the after-tax price must both be part of the negotiations<\/strong>. Getting the highest price for your business won\u2019t result in the most net gain if you end up paying a high tax rate on the proceeds, notes accountant Kohles. If you sell the shares in your company, you\u2019ll pay a lower tax rate. If you sell the physical plant, you\u2019ll pay a higher rate. In the first case the buyer is on the losing end of the tax question; in the second you are. \u201cYou have to package the deal so that there are some tax advantages for both of you; this is where having professional help is crucial,\u201d he says. If you\u2019ve taken depreciation on the equipment, you\u2019ll pay a higher rate. Sales of some assets, such as patents, are taxed at the lower capital gain rate. Selling your goodwill \u2013 elements of the business that relate to the value of your relationships \u2013 allows your buyer to write off depreciation.<\/p>\n","protected":false},"excerpt":{"rendered":"

Surprise, It\u2019s Not Only About The Price! Corporations are holding record levels of cash, interest rates are low and the housing market is rebounding. The result? Merger and acquisitions professionals are buying more businesses and high-end homes are selling faster — Silicon Valley had a 26 percent increase in sales of $1.5 million-and-up houses in […]<\/p>\n","protected":false},"author":1057,"featured_media":34225,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[43902],"tags":[],"class_list":["post-4260","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-professional-development"],"acf":[],"yoast_head":"\nHow to ensure a successful business or property sale<\/title>\n<meta name=\"description\" content=\"Surprise, It\u2019s Not Only About The Price! 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