What costs come with selling a motel?

Owners tend to plan for the sale price and forget the cost of getting to closing. Selling a motel is a project with its own expenses, and most of them arrive before you see any proceeds. Listing them early lets you decide what to do before listing, and lets you answer a buyer’s requests without scrambling.

Advisers and their fees

Many sellers use a business broker, a lawyer and an accountant. Each charges differently, and some work on a fee at completion. Ask every adviser in writing how they are paid, what is included and what extra work would cost. Your accountant can also tell you how the sale is likely to be taxed, which affects what you keep.

Reports and repairs

A buyer or the buyer’s lender may ask for a building inspection, an appraisal or an environmental report, and may ask who pays. A good inspection almost always finds something. Decide in advance which repairs you would complete before closing, which you would discuss as an adjustment, and which you would decline.

Brand and franchise requirements

If the motel carries a brand, read your agreement for what happens on a sale. The brand may need to approve the buyer, may charge a transfer fee, or may ask that rooms or signage be brought up to current standards first. Contact the brand early and keep the answers in writing.

Staying on to train the buyer

Many buyers want a period of training, and that is time you are not running other things. Agree on how long it lasts, what it covers and whether you are paid for it. Put the arrangement in the purchase agreement instead of leaving it to goodwill.