5 ways to sell a real estate business

What’s your exit plan?

You have decided to sell your business and have located a potential buyer. What are your options in terms of maximizing the amount of your sale from your real estate business?

If you do nothing else before you sell your business, the most important step you can take is to review the tax consequences with your tax attorney or your accountant. When it comes to selling, everyone’s situation is different.

For example, if you decide to sell your business and your house in the same year, you may end up paying a hefty amount in additional taxes.

On the other hand, you may have a buyer who is unable to pay all cash for your business. At this point, you may have to consider financing the deal yourself. Here are some of the most common models for selling your real estate business:

1. All cash upfront — you exit the business upon sale
While asking for all cash upfront may seem like a good idea, it may severely limit the number of potential buyers for your business. This in turn could result in a lower price. Tax consequences are another issue. Taking all your money upfront may result in you keeping less due to higher taxes. A specific issue to watch for is the Alternative Minimum Tax.