Many clients in commercial real estate brokerage today have an inflated view of market conditions when it comes to selling or leasing their property. That fact can then become a real hurdle in listing and marketing a property.
As real estate agents, do we take on a listing at a high price (or rent)? It is an interesting question that many will answer differently. Certainly we do have choices and all things must be taken in balance if we believe that a listing or client has merit for a potential sale or lease.
Definitely the client or property owner is entitled to have a positive view of what their property is worth, however if they are too far away from market reality then problems can occur. At the start of a marketing campaign for any listing, the first four weeks are critical to capturing interest from the market. Inflated prices or rents will stifle enquiry.
The right marketing approach and the right method of sale can bring the realities to the client quite effectively. Throughout any property campaign you can also give the client plenty of feedback as to the comments from inspecting parties. ‘Third party’ comments are useful tools in conditioning a client to market realities.
Here are some general rules to help with properties that could be priced or rented above market:
- Watch the other listings locally. You will find some comparable properties that are good indicators of market interest or stagnation. Either way you can tell your client about the strengths and weaknesses of other properties listed currently. When you want to use ‘comparable market evidence’ use photographs of properties in your discussions with the client. The ‘visual’ approach helps in sending the right messages to your client.
- Track all of the prices and rents from deals that are completed and finalised. Wherever possible graph the results. Graphs compiled over time are very powerful tools in any listing presentation or sales pitch.
- Time on market will change throughout the year. The time that it takes for a property to sell or lease will be a valuable fact when pitching for the listing.
- If a property is in your opinion highly priced, then let the market set the price by using a method of sale that is ‘market driven’. ‘Auctions’ and ‘Tenders’ or ‘Expressions of Interest’ are excellent methods to use in such situations. These methods of sale let the buyers set the price and conditioning is therefore much easier.
- Track the levels on inbound enquiry coming in to your office each week, and do so within the categories of local property or in the local area. Again it is wise to use a graph for the tracking process; the visual approach with your clients will be very effective in sending the message you require regards inflated prices in listing.
You could say that all of this is good communication when it comes to client conditioning and the listing of property. The fact of the matter is that most agents don’t have enough leverage and tools to use when helping the clients see the realities of the commercial property market and prices today.