So the property market is changing. Whilst that can seem frustrating, it is an opportunity for those agents that get organized and focus on new skills and habits.
It is no secret that the current commercial property market in many areas is quite slow and frustrating. Most properties that require leasing or selling will have limited enquiry. The property owners and the business proprietors that come to us for help in marketing their property should be suitably primed for the prevailing market conditions.
How Not to Waste Your Time
There is no point in an agent wasting time with an unrealistic vendor with a higher-priced property in this property market.
Given all of this, you will still see some agents take on an overpriced listing with the assumption that they can condition the client to a more realistic price over time. In exchange for that assumption, they will tie the client to an exclusive listing for a long period of time. I know there is some strategy in doing this but do you really want an overpriced listing to market?
Unfortunately, the client in this situation will soon see that results are not forthcoming from the marketing campaign. They will then put pressure on the agent for more activity and better results. The agent will become frustrated, and the client will become disillusioned. The result is an unsold property and an unhappy client. That will do nothing for your reputation as a top agent in this property market.
Changing Agent is Common
At the end of the listing period, the client will usually move their property to another agent, drop the price, and spread the word regards their misgivings and mistakes experienced with the previous agent. The first agent will suffer more reputation damage than is deserved. I would rather be the second agent at a reduced price than the first agent at a higher price and wasting my time. How does that sound to you?
It is better to take on listings that are realistically priced and owners that are open to the prevailing market conditions. All things taken in balance, there is a better chance of getting enquiry for a property that is realistically priced and correctly marketed.
Overpriced listings simply waste your time. They also create little enquiry of any substance. If you take a qualified buyer to an overpriced listing, they will usually criticize your expertise and the validity of the listing. They will also say that the vendor is ‘crazy’ to ask such a price. Buyers are not stupid.
The only time that you will see a vendor get away with a higher-priced property listing, is when the market is extremely active in an upward movement. At the same time, the supply and demand for available space will usually always be restricted. Lack of stock will drive the prices upwards. That being said, the commercial property market is based on a cycle. These unusual cycles are quite rare and will on average happen once in only every 10 years.
You will be marketing your clients listing into a property market today that is dominated by the decisions of sellers and interests of buyers. That is exactly what we have right now, and we all know why. For this very reason, your skills as a local property agent should be suitably improved and honed to correctly shape the listing for the prevailing market conditions.
Recommendations for Overpriced Properties
So here are some recommendations for dealing with higher-priced properties and unrealistic vendors.
- If the owner of the property wants to list at a high price, ask them about their priorities when it comes to results versus risking the reduction of enquiry. Highly-priced properties rarely create much enquiry.
- Most of the buyers in this market are familiar with the prevailing market conditions and price ranges. They will only inspect the property and make an offer when they believe the asking price is relatively aligned to the prevailing market conditions. They will not lift the telephone to make an enquiry with an overpriced listing.
- Give the seller of the property a comprehensive summation of the target market relative to the listing, and the prevailing price ranges relative to the target market. You will also need to make solid recommendations and observations regard the amount of local property enquiry and the best method of sale. Information and local market knowledge are the levers that will help you list the property correctly.
- When it comes to promoting a property today, the marketing campaign should be quite specific to the target market. Someone needs to spend some money to get the message out with some good marketing efforts. That will normally be the owner of the property. As a general rule, always list your properties with an exclusive listing process and obtain vendor paid advertising.
- When a listing is exchanged between the property owner and the agent, both parties should have a reasonable belief that the successful sale can occur. Wasting time and money will frustrate both parties if the listing is overpriced. Work together with the client and keep up the communications.
As a specialist commercial real estate agent, it is better for you to have sensibly priced listings that you can do something with, as opposed to lots of overpriced properties that create little enquiry. Set your rules when it comes to listing commercial real estate for sale today, and stick to them.