Selling in Today’s Market
The current economic climate has made it difficult for commercial real estate agents to represent owners and sell their properties at a price that matches what buyers are willing to pay. While buyers are looking for bargains, many sellers still believe that their properties are worth what they were at the market’s peak. This disconnect is causing frustration industry-wide, as many struggle to bridge the gap between buyer and seller expectations.
Tips On Getting Owners to Sell in Today’s Market
1. Understand the Owner’s Needs
Before approaching an owner to sell their property, it is essential to understand their needs and motivations. This includes understanding their financial situation, long-term goals, and any challenges they may face.
2. Emphasize the Potential for Growth
Despite the current economic climate’s challenges, there are still opportunities for growth in the commercial real estate market. As an agent, it is important to emphasize these opportunities to owners. Popular growth opportunities are the potential for redevelopment, the availability of government incentives, or the potential for increased demand in the future.
3. Provide a Comprehensive Marketing Strategy
In today’s competitive real estate market, it is essential to have a comprehensive marketing strategy in place to attract potential buyers. Agents should create a marketing strategy to showcase the property’s strengths and why by hiring your services they will attract more buyers. As a result, the competitive environment will drive pricing and excellent terms for the seller.
4. Highlight Agent Experience and Expertise
It is advised that agents highlight their experience and expertise within the commercial real estate industry. This includes their knowledge of the local market, experience with similar properties, and the ability to negotiate effectively.
5. Showcase the Benefits of Selling
Many owners may be hesitant to sell their properties in today’s economic climate due to the uncertainty in the market. An agent’s job is to highlight the benefits of selling. Some benefits include the potential for a quick sale, the opportunity to generate cash flow, the ability to capitalize on current market conditions, or getting built-up equity into a different investment opportunity. By highlighting these benefits, agents can help owners see the value in selling their property.
6. Stress That Selling and Repositioning Equity is a Seamless Process
A seller must understand that we are professionals in our field and that we are helping clients day in and day out to satisfy their 1031 Exchanges. Matthews™ platform and foundation are built with the client in mind. Defined by passion and guided by leadership from competitive backgrounds, our clients experience unrivaled execution and unprecedented synergy.
7. Why Some Sellers Are Reluctant to Sell
The sellers’ reluctance to lower their asking price may stem from their belief that their property’s value will continue to rise. However, historical evidence suggests that after hitting the peak of a real estate cycle, it takes between 10 to 18 years to reach the next peak. After each peak cycle, real estate values gradually declined for around five to six years before bottoming out and slowly climbing upwards.
8. How to Convince Owners to Sell at a Fair Market Value
Agents must establish whether the owner wants to sell at the best price possible in today’s market or is fixated on getting yesterday’s peak price. This information can be obtained by asking the owner if there would be a problem if they still owned the property five years from now if they can’t get the price they are looking for this year. If they do not mind waiting, they are likely not motivated to sell anytime soon.
On the other hand, if the owner says they cannot hold onto the property for that much longer, there is hope for a sale. These owners usually have plans for the money they expect to receive, making them more motivated to sell the property at the best price they can get within the coming months, no matter the market.
Additionally, several properties will have loans due, and some owners will need to sell their properties to avoid foreclosure. When discussing the market with these owners, agents can use historical data to show how real estate cycles have increased and decreased over time.
Agents must provide clients with current and sound information so that the client can make the best decision possible. Clients with strong information at their disposal tend to make good decisions related to their investments. Agents need to be advisors!
Takeaways
Selling commercial real estate in today’s economic climate can be challenging, but by understanding the owner’s needs, highlighting the benefits of selling, emphasizing the potential for growth, and providing a comprehensive marketing strategy and good information, agents can help convince owners to sell. As a commercial real estate agent, it is essential to be proactive and creative when selling properties and stay up-to-date with current market trends and conditions at all times.
