Hi, What is the difference between property sale and business sale?

In Buying Property - Asked by Cheng Z. - Aug 18, 2009
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Jack W.
San Rafael, CA

A business is a personal property, defined as that which is immovable by law, transaction. You are selling/purchasing the goodwill of the business. Goodwill is the continued expectation of patronage. This has a monetary value too complicated to go into here.
You are also purchasing the income expectations based on the past and the goodwill, along with other assets depending on the business. If it is a service business, say a pool cleaning business you are purchasing the customer list. Same with a medical practice. You would also purchase the attendant "hardware", file cabinets, medical equipment, etc. If a food service business the kitchen equipment and eating utensils, chairs and tables , etc. All of this is personal property.
The real estate sale is a transfer of REAL property, defined as that which is moveable by law.
In selling a business the real estate is a separate portion and valuation of the transaction. If you are selling a business that has a lease on real property you are selling the value of the lease. However, it is still a real estate transaction involving real property. If the lease is below market there is value to the buyer. If it is above market there is a loss to the seller to make it worthwhile to the buyer.
What ever you do deal with an experienced business broker. They are complicated and fraught with often unseen problems.
I hope that answers your question. If not please go to my web site, www.wres.net, or http://blogs.marinij.com/realestate/ to see other articles on real estate. Feel free to email me with further questions.
Jack Wilkinson, Rel Estate Advisor

Aug 18, 2009
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Susan M.
Dothan, AL

Jack was right with his explanation except the real vs personal property definition. Real property is that which is immovable (building & land), personal is not fixed (fixtures, inventory). Right answer just switched.

Aug 19, 2009
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Gregory G.
San Francisco, CA

The property sale comes with the real property, the land and immovable. Business sale is the Goodwill.

Sep 1, 2009
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