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How Commercial Brokers Can Recover In This Real Estate Market

By Jim Gillespie | December 9, 2008

This Wednesday, December 10th, I’ll be interviewing Bill Gladstone, CCIM, SIOR, who’s the best marketer I’ve ever known in commercial real estate brokerage, and you can have access to all of the information from our interview. If you want to learn the secrets behind how Bill’s making more money in this economy now than he did back in 2007, click here.

This is the third downturn I’ve been through in commercial real estate brokerage since I began my career close to 30 years ago. And this one is proceeding along fairly similar to the last two I’ve experienced.

A major problem right now for brokers is owners are still being unrealistic in their asking prices in many areas, but that’s going to be changing. And as this changes more sale transactions will begin to occur for many commercial brokers.

Here’s what I’ve determined are the 4 stages a market typically goes through when readjusting after a very hot market, indicated by what property owners are often saying to commercial brokers at each of the 4 different stages:

“You’re wrong about the market. My property’s worth more than you’re telling me it’s worth.”

Stage 2

OK, I agree that the market has changed. But I still won’t sell my property unless you can get me more for it than what other people have already offered me for it.”

Stage 3
“We need to sell this property. Where do we need to price it in order to unload it?”

Stage 4
“I don’t think we’re ever going to see another great real estate market again.”

And Stage 4, of course, represents when we’ve probably hit the bottom of the market and it’s the best time to begin buying properties again.

Most brokers I’m talking with all across the country tell me their markets are at Stage 2 right now. But I can also tell you that some property owners are beginning to show some signs of getting squeezed for cash right now. So it’s probably just a matter of time until Stage 3 arrives in your market if it hasn’t already done so. And when Stage 3 arrives and more owners are forced to sell, they can no longer hold out for these unrealistic prices. They have to sell at whatever the best price is they can get because they need the money. And this is when more sale transactions can begin to open up for you.

So keep doing your prospecting, do your marketing, and keep building your relationships with your principals. As more owners get forced to sell, more buyers will be able to purchase properties at the prices they’ve been waiting for, and this will translate into more commercial property sale transactions for you.

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