|Commercial Realtors - Get your price and market facts together.|
When a commercial real estate client approaches you to sell or lease their property they will have a predetermined idea of price or rental as the case may be. They will however test you to see if your price or rental expectations match theirs. They will also want to apply their ideas in the sale or lease process with regards to marketing and negotiating. Here are some tips from our Newsletter this week.
So the entire listing process is actually a negotiation; that negotiation allows you to get a listing that is correctly formulated for marketing, inspections, and closure. If the listing is incorrectly structured, it can be a very big time wasting exercise for the agent. A confident approach to the listing of any property is required.
Price HurdlesIn most instances, the price or rental required by the client or property owner will usually be at the high end of the existing market evidence. In some cases the price or rental that they require could be almost unachievable and well beyond any comparable evidence. The question will be whether you want to take on the property as a listing and market it under those conditions.
Some agents will take on anything, believing that they can condition the client into the correct price range or method of sale or lease. That is a strategic decision that can be made individually however make the right decision based on what you see and know about the client. On a personal basis, I would not waste time with property owners that show little flexibility to prevailing market conditions.
Don't Waste Your TimeSome property owners can be a total waste of time as clients due to some or all of the following:
- Unrealistic expectations with price or rental
- Reluctance to commit to paying marketing funds as part of promoting their property
- Failure to be fully open and trusting with the agent working on their behalf
- Lack of flexibility when it comes to the method of sale or the method of lease
- A tendency to work with many agents in an open listing situation
- Lack of motivation when it comes to a property decision or negotiation
So we can take one of the most important issues here and review it has to strategy and approach. It is the factor of price. A property that is too highly priced is likely to stay on the market for a very long time. Within approximately 90 days the listing will become stale and old news. This does nothing for the image of the agent as a professional and expert in the local area.
To support your estimate of price range with the client, the following strategy is useful:
- Visit other properties in the local area currently available for sale or lease. Take the necessary photographs and get details of the asking price or rental. Also seek details of the existing time on market as it applies to each listing. The improvements in each property should be relatively similar to the existing listing.
- Put together a history of other properties that have been sold or leased in the local area over the last 12 months. In commercial property this can be a challenge due to the unique nature of property improvements and location. If this is the case, you will need to break the price analysis back to a factor of yield or return on investment.
- Go through your database to see if you have some qualified prospects waiting for a property of this type. They may be suitable for an early inspection in the property marketing process. They can also give you feedback relative to the existing property price or rental.
The best property listings today are taken on an exclusive basis for a lengthy period of time. That allows the agency and the relative salesperson to formulate and activate the correct marketing strategy.
The marketing of commercial and retail property today is not an experiment; it is a specialised process requiring careful strategy. Protect your time as a professional in the industry by listing appropriately to the existing market conditions.
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