1. Hire the right real estate professional.
Selling a church has nothing to do with selling a house or leasing space in a shopping center. Hire a real estate brokerage with expertise in the sale of houses of worship. They will have the marketing know how to get your property sold quickly by using dedicated website marketing, targeted postcard campaigns, signage, publizing your property in professional multiple list services and knowledge of what other church groups may already be in the market seeking a new property. Should a potential buyer contact you directly make sure you refer them to you real estate broker. Your real estate broker should be the gate keeper for all showings of the property.
2. Understand how your property is seen by a buyer.
Price sells property. When buyers are looking for a church or house of worship for sale they have three targeted objectives:
- to purchase a house of worship,
- that seats as many folks as they expect for a typical Sabbath service, in an area where their members either already live or would travel to
- for an amount they can afford.
How is your property viewed by the prospective buyer:
- A beautiful museum with bad acoustics for contemporary worship,
- A renovation project that could quickly wipe out their budget,
- The prefect church but priced unrealistically high
- A great church but with limited parking,
- An expansive complex but with a monthly mortgage payment beyond our reach,
- A nice house of worship but in too rough a part of town for us to feel safe
- A nice church with parking but a little far out for our members to travel.
- A church that needs some updating, is priced within our budget and on the right side of town for our congregation
- The perfect church that allows us to settle on it so we can settle it.
3. You need to seat them first in the pews before you can pass the collection plate.
Too many clergy members see a building that is too small but feel they can still make the property work. Bankers may see the property differently. Remember a banker is looking at numbers on how many people will the sanctuary hold. If you can't put them in the pews you can't call them givers. The price of your church has everything to do with seating capacity.
4. Is the condition of your property comforting or concerning to a potential buyer?
We've all seen properties for sale that required so much clean up and repair that buyers were blinded by the problems to even consider making a legitimate fair market offer.
To put potential buyers at ease:
- Clean the property and grounds of trash and clutter,
- Repair and repaint water damaged areas where the water leaks have been addressed but the staining remains,
- Fix broken toilets, sinks and water fixtures,
- Professionally steam clean soiled carpeting, Replace with new carpeting if too soiled or threadbare,
- Replace missing or non working light bulbs throughout the complex
- Wash the floors and if appropriate coat with a semi-gloss sealer to give a new shinny appearance
- Wash windows
- Cut grass, trim trees and mulch flowers beds to give a well cared for appearance
5. Offer and advertise financing assistance if possible.
Churches, especially smaller ones, attract buyers that may be start up congregations, small house churches with little borrowing experience or individual pastors looking to establish a church. Many times these buyers don't have the ability to borrow conventionally the amount of money required to purchase the property. This may be because they don't have the 20-40% down that many lenders require or because although they can post the deposit they can't afford the monthly mortgage payments. Work with your real estate broker and or lawyer, offer in-house financing. This can be done as a seller held second mortgage where the seller finances a portion of the purchase price by deferring payment for a period of time with interest accruing until that loan is paid in full. This allows for a buyer to qualify for a smaller loan since they only need to qualify the loan amount the buyer isn't financing.
If the property is owned outright the seller may be able to finance the property at conventional interest rates but with a lower deposit and longer term of loan to allow the buyer to afford the property. Since the seller holds title to the property with a first lien, risk to the seller is minimized. Should the buyer stop making the required payments the building will convey back to the first mortgage holder (the selling church )after completing foreclosure proceedings.
6. Offer a "Lease To Own" option.
Many smaller congregations need to raise money to purchase but might have trouble doing so if they can't expand their membership. Offer them the right to use your sanctuary at a time when you are now using it under a Lease To Own arrangement. Let's say you charge them $2000 a month rent but $500 of each month's rent is credit towards the deposit. At the end of five years they have $30,000 toward the purchase of your building.
7. Don't keep your property's sale a secret.
Let your community know that your property is for sale. Word of mouth is a power selling tool. If you are moving to a new location or merging with another congregation put that information on the "For Sale" sign so your community doesn't think that you have ceased operation. If you publicize your move or merger with a community newspaper emphasize that your existing property will be for sale through your real estate broker.
8. Run a title report before you sell.
It typically takes many months or even years too sell a church or house of worship but once a buyer does submit a contract things tend to go quickly. Avoid costly delays in settling by running a title report and resolving any outstanding items such as liens, boundary issues or incomplete government paperwork. While your reviewing this paperwork , review your corporate charter to insure that your group actually has the authority to sell your church or house of worship.
9. Create a list of conveying chattels
Most church sales don't only convey the building and ground (real property) but the sale include much of the fixtures and furnishings as well (chattels). Create a list of every item that is expected to convey with the sale such as pews, organ, desk, office equipment, choir books, lounge furnishings, kitchen equipment, dishes, janitorial supplies.
10. Assemble a property committee.
Typically the sale of houses of worship is conducted by a group appointed specifically for this assignment. If this is your method of operating, have your committee in place prior to hiring your real estate broker or listing your property for sale. By acting on this step first, you can save time and headaches by addressing issues such as timing, required minimum price, timing expectations, naming a person to act as the point person between the real estate broker and potential buyers.
Stephen J. Ferrandi