Your commercial property won’t sell, you listed your building up for sale and it simply didn’t sell. The first thing to do is to take a step back and analyze the situation. Try to assess what factors led to your property not selling. Below are the top four reasons why properties tend to languish on the market
Commercial Property Won’t Sell? Consider These Factors
(1) Is My Commercial Property Overpriced?
Overpricing your property is usually the number one reason it did not sell. The price of your property should be competitively priced with other buildings in your area which have similar features. Your real estate broker will help you establish the best price based on the competition.
Price reductions can be an issue in the pricing game. Many owners set an asking price above the market with the idea they will reduce the price as time goes on. However, doing this can mean being passed over by real buyers who end up purchasing comparable properties as the right price. By the time you reduce the price to where it should be, you & rsquo;ve lost access to the first round of buyers. You can counter this by making your price reduction extremely competitive.
Properly pricing your property is as much an art as a skill and your commercial real estate broker will help you assess the competition and help you establish an asking price that will get the property sold.
(2) What is the Condition of the Property
All of the cosmetic things, such as paint, landscaping, window coverings and flooring should be in good shape and the building should be spotless inside and out. It’s amazing how most buyers refuse to see through superficial, cosmetic shortcomings. And making these cosmetic improvements is relatively inexpensive. To get the building sold, make a small investment in
Landscaping Make sure lawn is in good shape and trees and shrubs neat and trimmed. Make sure walkways are clear. If you don’t have the time to do it, pay someone.
Exterior Make sure there is no chipping paint, dirty windows, or clutter. Most importantly, remember that most buyers will notice the condition of the front door when they walk in.
Interior Make sure the carpets are clean and attractive, the walls painted (if it needs it) and clean (no smudges.), the break room clutter-free and the windows are spotless. Also, remove excess furniture since excess furniture makes rooms appear much smaller. Make sure all clutter is off the floor and organized. And finally, make sure the smell of the building is appealing.
(3) Was Your Property Aggressively Marketed?
Another primary reason your commercial property won’t sell is a simple lack of exposure. In a very hot market, a listing in services like CoStar/LoopNet alone should generate an adequate number of buyers. However, if your market is anything less than red-hot, your building needs aggressive marketing.
Many buyers work with a commercial real estate broker. Your broker will make sure your property is exposed to the active buyer & rsquo;s brokers in your area through listing services, emails, phone calls and open houses. Also, most active brokers have a strong network of other brokers and buyers and can introduce your property directly.
(4) Did You Hire The Right Commercial Real Estate Agent?
Like any profession, there are very effective and ineffective commercial real estate brokers. Many commercial real estate brokers work hard and employ strong marketing techniques. They have a strong network and access to buyers. Many work hard to get your building sold. However, many do not. Did your broker simply place the building in CoStar/LoopNet/Xceligent? Or, did she or he inform their network of buyers about your property? How about presenting your property at sales meetings both at her or his office and other company offices? Did she or he promote your property with email announcements, brochures, banners, and signage to showcase your property?
Ask yourself, was your broker passionate about selling your property? If not, now is the time to find the broker who will get your building sold.
Investing In Commercial Real Estate?
Looking to invest in Arizona Commercial Real Estate? At ICRE Investment Team, we work with commercial investors, property owners, companies, banks, and commercial loan servicers seeking the highest quality of services in the greater Phoenix, Scottsdale, Mesa and Tempe Arizona regions. Contact us for more information.