“Catch a Tiger by Its Toe – Take the Guesswork Out of Choosing a Listing Agent”
Owners of commercial property may think that advertising their own properties for sale or lease will save money on agent commissions. The truth is, advertising a commercial property is easy, unless you are doing it right. An effective agent will more than compensate for the commission expense by selling a property for a higher price and in a shorter time span than putting out a for sale by owner sign.
Deciding to hire an agent should be a no-brainer. The hard part is deciding which agent is best because not all listing agents are created equal.
In this second installment of this blog series, I will share two features you should look for in a listing agent.
Choosing a list price is a very important decision and one that should not be taken lightly. The right price will help the property sell quickly and for the best possible profit to the owner. The wrong price could cause the property to sit on the market for an extended period of time while the ideal buyer passes it by until the property eventually sells for less than market value.
The highest possible sales price is in the best interest of the owner because it contributes directly to their profit. However, listing agents have less incentive to maximize the sale price of a property because of their commission being a small percentage of the overall sale price. For example, if a list side commission rate was 2.5%, a $10,000 increase in sale price would only increase agent commission by $250. In fact, a lower list price may help the listing sell faster and require less marketing effort on the agent’s part.
The method in which an agent determines a list price speaks to the planning and consideration the agent is placing on selling your property. Rather than trying to compromise on two opposite opinions of a list price, a listing agent should provide a comprehensive broker opinion of value. This is a report that shows current market research for similar properties that are currently listed and those that have recently sold. A property owner should be able to review the report and make an informed decision about their desired list price.
Beware of agents who just take your word for the value of the property and do not research the current market value. Beware of agents who seem to be pressuring you to lower your price without providing market research to support their opinion. While taking into consideration the suggestions of the listing agent, the final decision on a list price should be made by the property owner.
Perhaps the greatest distinction in listing a property with a commercial agent as opposed to advertising it by owner is the advertising plan. Be sure to ask for the details about how and where a prospective listing agent will be advertising your property.
A good agent understands that the more places and methods used to advertise a listing, the more buyers will see the listing and, as a result, the more offers will be made on a listing. It is an economic truth that the greater the demand for a product, the higher the ultimate sales price.
A comprehensive advertising plan will go beyond a ‘for sale’ sign on the property and a listing on the local MLS website. Depending on the details of your property, an advertising plan may include a long list of local and national online property databases, print advertisements, and classified listings.
Make sure that your listing agent understands where to advertise commercial properties, as opposed to residential properties. Also ask how your property will be input onto each website. Will the agent need to type in the property details on each website one at a time? Or does the agent have technology that syndicates the initial listing, as well as any future updates, to all of the online listing and property databases?
When selling or leasing a commercial property, it is important to select a listing agent who has your best interests in mind. Take your time to understand what a prospective listing agent plans to do for your listing. Selecting the right agent will help your commercial property sell for the highest price the market will bear in the shortest timeframe possible.
Please stay tuned for my next blog in this series.
About Stephanie Gilbert – Stephanie has been working in commercial real estate since 2003. Although she has done a variety of deals, her focus and passion, when it comes to commercial real estate, is leasing and selling office space, primarily in the Pensacola, Florida area. If you would like to contact her, you can call her at 850-610-8339, or email her at [email protected] You can follow her on Twitter at @.
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