When it comes to selling a commercial property, it is not always the best strategy to put a price on the property and advertise it as such. Advertising a property at a price is a strategy that should be regarded as a last resort.
If the property has exhausted all other methods of sale then the pricing process may be acceptable. Up until then, there are some other very good methods of sale that can be explored subject to the conditions of the market and the type of property to be taken to sale.
Here are some very clear reasons why you should not put a price on a property:
- It shows the local market the ultimate price that the property owner requires. Regrettably many property owners stack up the price so they can negotiate downwards. This stifles the enquiry from genuine purchasers. The process can also kill the listing marketing campaign.
- Pricing a property and advertising that way is a process of hoping and waiting for the right purchaser to come along. Selling a property at a price is usually a long and drawn out process.
- In some respects, a property that is promoted a price is regarded by purchasers as generic and nothing particularly special. The property ranks amongst other ordinary properties in the local area. There is no urgency to the sale process.
- The property market is changing so fast that price determination is quite difficult for some properties and locations. The price can in many situations be a calculated guess.
When a property comes on the market for sale, it is the period of the first 4 to 6 weeks which are most important. During that time enquiry will be generated and inspections will occur providing the property is correctly promoted.
The qualified buyers that inspect the property will put their own price on the property based on local market intelligence. These buyers know what prices are doing and are usually far more realistic than the sellers of the property.
The critical issue in selling commercial real estate is to get fair and reasonable offers from the inspecting qualified buyers. If the method of sale you choose is supported by time factors and closing dates, it is quite likely that you’ll get offers that you can seriously consider.
The best time based methods of sale to use with commercial investment property are auction, tender, and expressions of interest. They all suit the marketing of commercial, industrial, and retail property. A local real estate agent will understand the best methods of sale to use given the prevailing property market conditions.
Even in today’s property market with its economic challenges and difficulties, the best initial methods of sale for commercial real estate still remain as auction, tender, and expressions of interest. If the property still is unsold after one of these methods has been correctly used, then the owner can resort to the standard price and hope approach.
The sale of a commercial or retail property is a complex process requiring knowledge and strategy. This is where the real estate agent that understands the local market can add significant momentum and focus to the sale process.