Sellers’ Revenge - 5 Methods to Attract the Highest Price & Best Buyers

Take Advantage of This Historical Market

So you’ve decided to sell your commercial or industrial real estate. The market you are being told is selling at historical pricing levels, and you want out. So you meet with your marketplace brokers, gather your market info and in your mind decide what you will sell for and proceed to prepare and present your property to the market.

Now stop, drop and roll - the market is on fire but all properties were not created equal and all are not “on fire” when it comes to pricing.

Below are 5 Methods and Actions to Attract the Highest Price and Best Buyers.

Read On:

1. The Bank is the Decider - Remember most if not all buyers require debt to purchase a property so whatever the lender's appraiser says it is worth is what the bank will lend upon. Your sales price must be in line with the market and enable buyers to buy with debt. The first way to blow up a deal is for the property to not appraise. Review the market comps with your broker closely and really understand them and price accordingly. A good broker should be able to “HELP” the appraiser get to the values you want to get the deal done.
2. Beat the Bank - one way to eliminate the need for a buyer to utilize a traditional lender is to offer “seller financing” and avoid the bank altogether. If you owe nothing or have a low loan balance offer buyers seller financing. It is a great way to procure a high sales price, eliminate the underwriting process that can interfere with your sales price objectives. Many buyers are well qualified to purchase and with an appropriate amount down, skin in the game, you can sell your property at a great price and then make a return on your money as the lender. It is really simple and should not be overlooked as “too risky” - remember the loan is securitized by the building.
3. Curb Appeal - ladies and gentlemen it matters. Just because it is an industrial building does not mean you can leave it looking like a pile and expect to compete and achieve a record sales price. A good looking and in good repair building will typically fetch higher values, more importantly the seller can demand a higher price. Redo the landscape, paint the building, slurry the parking lot, fix or repair the roof (many roofers will offer a 3-5 year warranty if you do some minor work on the roof and have an annual maintenance plan) this is a great incentive to a buyer. All of this does matter even in a “UP” market. When I have a property for sale I always encourage my sellers to do these and other items that really do pay off.
4. In the Zone - most property owners believe they know what zoning they are in but these can often time change or be amended by the city which can have a huge impact on the properties value, both up and down. Check current zoning, overlay zoning, or for specific plan inclusions as it can dramatically influence value. For example, if your property has been included in an “overlay” zone for residential redevelopment it can mean a significant change in value for you. A good commercial broker can and will confirm these details and pricing impacts.
5. Don’t be Greedy, Be a Seller - I am very BULLISH on pricing, however, I’ve seen it many times over the years with sellers. I and other brokers present them with an opinion of value, which is based on marketplace values, demand, property location, condition etc. and then the seller comes back with some ridiculous value that they have pulled out of their &^%. When asked how they arrived at that value they have no valid response just a “hope and a prayer” that the market will carry them. Typically 2-3 years later the property still sits unsold with an ignorant owner who believes that “someday” it will sell at their price. You really aren’t a seller if you think and act like this.
6. EXTRA EXTRA
7. Hire a Commercial real estate broker, not a Residential broker - No we are all not created equal. Resi brokers work on residential properties and many are experts at that, they are not experts at commercial property. I know your sister in laws, best friends brother is a residential real estate broker and says he can market and sell it and will charge you a lower fee. Don’t believe him, I have been able to purchase industrial properties listed by “Resi” brokers for anywhere from 10% to 30% below the market. They just don’t know nor do they have the data set, tools, information and market knowledge to understand and value your property. CRE brokers do and most of us work in a specific locale and can value a property and sell it for top dollar.

Happy Selling and great real estate...

Cameron