My favorite type of appraisal work is for commercial property owners who simply want to know what their property is worth. These types of assignments give me the opportunity to work very closely with the property owner to educate them about the factors that influence the value of their commercial property. The most rewarding aspect about these assignments is the satisfaction of knowing that the skills and expertise I’ve gained over the years has made a real difference in the life of another person. Knowledge regarding the value of your property makes a difference. I promise.
Over the last twenty-five years I have performed thousands of commercial property appraisals. I’ve seen circumstances in which saavy investors have made millions. But I’ve also seen circumstances lives have been ruined. For those who are selling commercial property, here are three mistakes to avoid.
This may be the most common (and easily avoidable) mistake I see. Let’s face it – we all want to get the highest price. But the best potential purchasers are those actively engaged in exploring different alternatives. Properties that are overpriced when intially introduced to the market will stick out like a sore thumb to market participants. I have heard numerous brokers bemoan the fact that some property owners are clueless regarding the value of their property. And on more than one occasion, they have expressed their gratitude that I had been engaged to appraise the property, helping to lead the owner to more realistic expectations.
A close friend and active investor recently told me that more money had been made in the few years following the recession than at any other time in history. He’s probably right. That’s because smart money is counterintuitive. When the market is selling, smart money is buying. When the market is buying, it’s selling. Don’t make the mistake of following the crowd.
Smaller commercial buildings are often purchased by business owners. They may have achieved a high degree of success in their chosen industry but lack the sophistication or the time necessary to become educated about the value of their property. Larger commercial buildings, especially those designed to generate rental income, are marketable on a regional basis and often purchased by sophisticated investors. In both cases, I often recommend the services of a professional commercial broker. Reputable brokers may specialize in a specific property type and they often know the players searching for a building just like yours. A good broker will earn their commission.
A Final Word
Hopefully, this article will help you avoid some of the common pitfalls made when selling (or buying) commercial property. Arming yourself with knowledge helps. Knowing the value of your property is part of that process. That’s where we can help. And we’re making things simple. Just click on the quote button below and we’ll respond within 24 hours.
But I’m interested, what are some of the mistakes you’ve seen made when selling a commercial property? Please feel free to comment below.