Still More Mistakes Made When Selling Commercial Property

Underestimating the time needed to fully expose the property to the market.

I know what you’re thinking, “You REALTOR®s are a crafty bunch! I just know that you can get this property sold quickly, but you want it to sit around to generate calls so that you can go off and sell someone else’s property so you can make more money! Greedy so-and-so’s....grrrr."

No. We don’t.

What often gets forgotten here is that we don’t get paid until the property is sold and the commission cheque is cut. Until that point, we’re out of pocket and want to get paid sooner rather than later. That isn’t a problem for us, that’s the way it’s done, and we wouldn’t be doing this if we felt that the system was unfair or not equitable for all parties. Please don’t think that, because your property doesn’t sell quickly, your agent isn’t working hard on getting it sold.

Using a short listing period as some sort of cattle prod to try to get your agent moving more quickly is just a recipe for reduced effort on the part of your agent. Yes, you read that correctly; it takes a great deal of effort and time to get a successful marketing campaign off the ground. This is especially true if your commercial REALTOR® uses targeted marketing and develops new databases specifically to sell your unique property. It might take a few weeks to start hitting the right segment of buyers and several more before they start looking at it seriously and several more before they consider making offers. If there isn’t an expectation that your agent will have time to actually go through this process before the listing expires, then who’s to say that the effort will really be there? I’m not saying that there would be any insincerity or lack of will on the part of the agent, but if you won’t trust your agent with a reasonable listing period, why should they trust you to work with them in the long haul and how can you expect a full marketing effort with not enough time to perform?

Since January 1, 2008, it has taken an average of 132 days (just over 4 months) to sell commercial listings on the Peterborough MLS® (data from Filogix database as of 11:00 am on January 23, 2009). Still think a 60-90 day listing period is reasonable?

Not providing enough information about the specifics of your property.

There are a great many things your REALTOR® will need to know to adequately be prepared to offer your property for sale. Failing to provide enough information and worse yet – concealing defects – will cost you time and money in the process. You want a buyer to be able to make a buying decision quickly and easily; the best way to accomplish this is to provide as much information as you can right up front.

This does a couple of things for you: it simplifies the due diligence process once you’ve obtained an offer making the process quicker and easier, and it pre-qualifies the buyers. How? If you have a building with 10 apartments showing a really great return it should attract a fairly sizable pool of buyers. But what if your building has an historical designation that also required a certain level of care beyond what is normal in an investment of this type? This isn’t necessarily a detriment to the property, but it probably eliminates a few of the buyers who might have long term visions of conversions or redevelopment. Why not weed out those buyers with extra information before you and your agent spend a great deal of time trying to get showings arranged and offers presented only to find out that the property ‘isn’t what the buyer had in mind’.

Provide ample information up front and shorten the time it takes to get an acceptable offer – and usually for more money.


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