Tuesday, November 6, 2012

Pricing to Sell...(Sellers Only)

Once the decision’s been made to put your commercial building on the market, the Million Dollar question that arises is – what sort of asking price do we set? In early blogs we’ve discussed valuation techniques, made suggestions relative to interviewing brokers, and even covered the topic of formal appraisals. All of this should have put you in a position of understanding the value of the property.  Now the moment of truth is here and its time to establish a price to market the property at.

Before you do set the price, some final questions worth considering:

Market Turnover – what sort of commercial property turnover rate is your area exhibiting?  How long has it taken to sell similar buildings in your market – on average 2 months, 6 months, 2 years...?

Commercial Financing – is it available through conventional means and at what sort of rates/terms?  Financing a commercial property is generally necessary, and we need to understand all of the options available.

Buyers Market vs. Sellers Market – what sort of market is your area experiencing?  In short, more sellers or buyers, price growth or decline, and general market activity/traffic?

Local Economy – is it expanding or contracting, is unemployment rate lower or higher (vs. national average), new housing starts up or down, and is there population growth? Call this Economics 101 – but you need to be in step with your economic (market) realities.

Competitive Positioning – do you have a competitive advantage relative to competing properties in the market?  Better location, superior building quality, discernable site advantages … giving you the ability to promote better value for your property?

Finally, ‘Serious Buyers’ tend to prefer ‘Serious Sellers’, and vice versa. Your asking price should reflect the fact that you are serious, and that you have priced your property accordingly. Give your asking price careful consideration, in order to put yourself in the best position to successfully sell your property.

As always, consult with experienced commercial brokers within your area in order to determine a ‘Pricing to Sell’ strategy.

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