Listing Price - Why it Matters

The biggest mistake commercial and investment sellers during the selling process is listing their property too high. Here are reasons why sellers make this mistake:

1. Greed
2. Need the excess capital to fix another problem
3. Ignorance of market
4. Want to "test" the market

 I've been in front of hundreds of high pricing prone sellers as they review my pricing recommendations and I find it amazing how the conversations are so similar. Phrases like "You start high" or "My property is worth more than..." and "These are not good comps" and "Actually, I didn't report all my income" and "It's your job to bring good offers"".

Here is what happens when sellers list too high:

1. Investors pass during the important 1-6 month initial window due to over listing the property 
2. The property is regarded as "stagnant" or "has something wrong"
3. The seller gets angry at their broker due to lack of activity
4. Seller fires broker
5. Seller has damaged the market value of their asset
6. Seller eventually sells asset at price recommended by broker or lower, but takes much longer

The best way to sell an investment property is to price the asset close to market price with a little extra wiggle room for buyers to feel as if they have "won" the negotiation. I prefer to present my analysis on market value (Broker's Price Opinion) along with the marketing material to buyers with sellers permission.

If you would like to discuss the market value of your property give me a call.

Nick Gustafson

605-201-2809

nick@benderco.com