Avoid overpricing your property this year or you could risk your building remaining on the market for an extended, cash-absorbing amount of time.
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Did you know that you can overcome the challenges associated with selling your properties during an economic slowdown by opting for smarter pricing strategies? This strategy can help you to sell your real estate without the lengthy waits while negotiating with buyers.
In the current buyers’ market, you need to ensure you price your commercial real estate strategically (and realistically), or you could find yourself with empty unprofitable buildings that nobody is interested in purchasing.
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“As the market pendulum shifts towards buyers, the challenge will be on for serious sellers to realise that they are now competing with other properties and will need to set their asking price expectations at the right level,” explains Samuel Seeff, chairman of the Seeff Property Group.
“If you are looking to sell, always guard against giving a [Sole] Mandate to the agent that promises you the highest price, Samuel Seeff, chairman of the Seeff Property Group says. “That is not the smart way to sell as any successful seller will tell you.”
If you’re using estate agents to sell your commercial properties, you may want to reconsider. These professionals arguably tend to inflate the price of your property in order to obtain a Sole Mandate and better margins on their sale. How this impacts on your commercial property business is that it will take longer for your property to sell, if it sells at all.
It’s a buyers’ market out there
Your buyer isn’t going to pay more for a property than it’s worth. In fact, the final purchaser is the one who actually determines what your property is worth. Considering the current state of the market, your property is competing against many other properties too.
Seeff also explains that if you go to market at too high a price, you are only wasting your time as buyers will simply go to another property or wait until you finally bring your price down.
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Implement smart pricing
Smart pricing is the ability to correctly and accurately value your property, which will allow you to attract buyers and offers. However, this is a specialist skill, which either means you’ll need to employ someone within your business or hire an outside consultant to conduct this evaluation.
Use this specialisation to ensure you don’t sit with an empty building that’s still costing you rates, taxes and maintenance. Seeff explains: “The ability to read the market is vital in providing an accurate gauge and price range aimed at leading to a successful sale that satisfies both the buyer and the seller.” Having this ability in your arsenal can give your commercial property business a competitive edge.
- Do it yourself; or employ someone to work within your business who is updating the price of your buildings depending on the state of the market.
- Ensure that, property brokers or sales agents aren’t luring you in with the possibility of high profits by exaggerating your selling prices.