When it comes to listing a commercial or retail property at the right price or rent, the comparable market analysis process will be critical to getting a good listing that is marketable. Clients can tend to think that their property is worth more than any other in the area.
The fact of the matter is that buyers and tenants today are not economically ‘simple’ or ‘dumb’. They have done their homework and they know what other properties are offering locally. Any offer they make will have relevance the market today and will push for a top deal from their perspective.
Most buyers or tenants will only make an offer if the property is priced at around the right figure that is supported by market information and facts. Overpriced properties do not create much enquiry and that is a fact.
The listing and marketing of a property today is not an experiment; they are facts and processes that need to be well managed. That is what top agents do all the time. They have a system and strategy; it works for them.
Here are some tips to help you structure a good comparable market analysis (CMA) document to use with your client.
- Define the area that is relevant to the property type. That area will have trends that can be tracked. The trends will be in price, time on market, improvements, supply and demand for new space, and zoning changes. All of this information should be taken into account in your CMA.
- Look at sold properties first and get the fact of the final deals done. Final prices will be different to asking prices. Those final prices can be hard to chase down, and you may need to talk to other property agents to see if the final price information will be given out. If you cannot get the price information that way, you will need to wait for the sale to go through the ‘online’ sale results, and that can take months to feed through.
- Determine the improvements in the subject property so you can relate them to any other listing comparison that you may undertake. To be comparable the property should have similar improvements or be adjusted for differences in improvements.
- Check out any unsold or unleased properties in the market today as they will show trends of what works and what doesn’t when it comes to marketing and promoting properties locally. You do not want to be repeating any errors.
- Property relevance and the types of improvements will be important in any comparable price assessment. If necessary you will need to inspect those comparable properties so you can check their relevance, age, and presentation.
All of this information above should give you the opportunity to make solid recommendations to the client. That is what a CMA is all about. When you do this correctly you will get a better quality listing, and a conditioned client. Those things will allow you to convert a deal quicker.