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Differentiating the Real Sellers from the Sellers Who Will Waste Your Time

By Jim Gillespie | October 15, 2007

So much has changed in so many real estate markets across the country. The residential markets have changed dramatically in many areas over the last 18 months, and some of the commercial markets are beginning to feel the transition now, too. In talking with many commercial brokers all across the country it seems that the investment markets are cooling off more than the user markets, as companies still want to buy and own their own buildings when they can do it for a fair price.

One of the problems for commercial brokers in this transitioning market, though, is identifying the sellers who are real and differentiating them from the sellers who will talk about selling their properties, but who will totally waste your time. These latter owners are the ones who will bring you great pain and suffering if you don’t learn how to identify them quickly when interacting with them.

When the market was hot in many areas owners could ask high prices and completely get away with it. The market would catch up with the high asking price within 1-4 months and eventually the property would sell at or near (and sometimes above) the listed price. But that’s not the case in many areas anymore. The problem is many brokers are still working with owners who are asking the high prices, but the market just won’t catch up with these high prices. So in many situations, unlike when the market was hot, the sellers who want higher than market prices for their properties today aren’t sellers that you can really do any business with, unless they have a true underlying reason to sell…

These true underlying reasons to sell include needing to cash out to get some money, desiring to trade into another property, wanting to trade into a property with less management, wanting to trade into a property that has more cash flow, wanting to trade into a property they feel is a better long-term investment, selling their property because of a divorce or a dissolution of partnership, selling their property because their business needs to relocate into another facility, or selling their property for estate planning purposes.

A seller who will only sell if they can get an unrealistic price in today’s market, and who has no additional underlying reason to sell their property, can be a major headache for you. So you’ll want to identify these people as soon as possible and avoid spending your time with them. Look instead to find sellers who have a genuine underlying reason to sell at today’s fair market value, and who feel that continuing to own their property one year from now is not an option.

So when you think you may be dealing with one of these unrealistic owners, ask them a question similar to the following one:

“How will you feel one year from now if no one has paid you the price you want for your property and you still own it?”

And if the owner responds to you with something like, “It doesn’t matter to me. I’m prepared to wait 5-10 years if I have to to get this price for my property,” you might want to turn and run in the opposite direction! The last person you want to be dealing with is an owner who isn’t motivated to sell their property, and who’s willing to wait a long time until they finally get their price. In this day and age in commercial real estate brokerage, determining who these people are and getting them out of your life as quickly as possible is one of the greatest skill sets you can learn.

With all of this in mind I’m just about to complete an E-book titled “Convincing Owners to List at Your Recommended Price,” which shows you how to overcome 14 different pricing objections that owners will throw at you when determining how to price their property. If you’d like to find out how you can receive one of these E-books for FREE from me click here.

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