As the local real estate agent it is quite common when you are selling commercial property, to get to a point where the seller will not negotiate down on price, or accept that the value of their property is less than what they want. More often than not, they will then tell you to get an offer before they will talk about reducing the price. You know that offers will not come in until the price has been reduced significantly.
Do Not Advertise
A property that is well away from market price should not be advertised in this market, as the first few weeks of marketing at the high price will kill ongoing enquiry.
This is where experience and negotiation skills of the agent become quite important. The reality of the situation is that the offers do not come in to you because the property is priced well above the market; you know that the only way to get an offer or even interest from anyone is to get the asking price of the property down.
Where are the Buyers?
There are buyers out there waiting for the right property at the right price. When you are marketing a property, a higher price will kill any enquiry, it’s that simple. We are not working with the 10 buyers on one property that we had 4 years ago; more often than not today we are seeing only 1 or 2 buyers for each property. Only a few buyers can act in this market, and that is why we must work with what we have.
In this tougher property market, the buyers are more selective and the ‘heat’ of the market has gone. On that basis we are negotiating with fewer buyers and the buyers are less inclined to negotiate until they are ready. Property negotiations today are slower and tougher. The agent will more often than not have negotiation challenges with the seller and the buyer.
Third Party Proof
The only way to handle sellers and buyers that are reluctant to move on their asking figure or offer is to use a third party authority or proof on the price. You have to get evidence of the reduced prices in the market and then use the evidence in the negotiations.
Third party evidence is not fabricated, and it is the ‘real deal’ when it comes to shifts in prices. It is the comparable evidence of other property sales in the local area. It shows your seller that things have changed.
It will take you more time to get the price ‘evidence’ but it is worth it, and will support your case for a more realistic price on the listing. It will help you close the deal.
If you want more tips for commercial real estate sales and leasing in this market, visit our website at http://www.commercial-realestate-training.com/