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Best methods of sale for commercial properties

Numerous sales strategies are trending in the world of commercial real estate right now. However, it takes some research and consideration to choose the one that is best for your client. After thorough research, weighing out the pros and cons is perhaps the only way to sell the property at or above its market value. Keep in mind that property owners tend to gravitate towards the cheapest and least time-consuming methods of sale for commercial properties. However, taking such routes may be astoundingly ineffective. That is why successful real estate agents never go for the most obvious selling strategy.

Commercial real estate buildings

Sale at a fixed price is not the best method of sale out there

An essential aspect of the selling process to keep in mind is the contingency of the marketing campaign on the selling strategy. Likewise, the usual ‘sale at a fixed price’ method is simply not applicable to all contexts, especially in commercial real estate. Experienced real estate agents in your area will be aware of this, so be cautious and explore other options carefully. Your clients will rely on your research skills, judgment, and expertise, so never lose this out of sight. But no need to worry. We are here to introduce you to the most effective commercial property selling strategies and the situations in which you can use them. So, let’s take a look.

Sale by private treaty

This sale method is also referred to as the ‘float and home’ method. Namely, the asking price is set very high at first. The idea is to allow the buyer to lower it, but only to work in the seller’s favor. This means that the seller is in control during the listing process and the buyer during negotiations. However, the given method allows the real estate agent to ‘haggle’ during negotiations. Yet, you must have the necessary negotiating skills and experience.

If you choose this method, prepare yourself and your client for a potentially drawn-out marketing campaign. Following this selling strategy, you want to maximize the property’s exposure to the greatest number of buyers. Selling to the first bidder out there usually results in a non-lucrative sale. However, as we mentioned, waiting for an adequate offer might drag out the promotion of the property.

Use the treaty method carefully

Undertaking this strategy can be a double-edged sword. On the one hand, you might be able to drive the buyer to accept a higher price. On the other, you are risking selling the commercial property under the market value. As a result, most experienced commercial real estate agents tend to avoid this method of sale. This is particularly true when the market is saturated with good property listings. In other words, resort to this method only if the property has a lot of potential and the local market is unusually quiet.

Also, take into account that you might have to go through several rounds of negotiations. The longer the commercial property lingers on the market, the more it is depreciated from the point of view of all the parties involved. Sometimes it happens that the interested party even backs out of the negotiations.

This can seriously damage the seller’s plans, especially if they have set the moving out date. A remedy to this problem can be to hire the services of a moving company such as as their experience and flexibility can help you find a way around this problem.

There is even a term established to describe such properties - lemon. The high pricing or too much time spent on the market puts off buyers like a domino effect. This sour situation is something you should avoid at all costs. So, make sure you don’t overinflate the asking price, as it might entirely extinguish the buyers’ interest.

Sale by tender

Selling a commercial property using this method allows you to remove the asking price entirely. As the interested buyers come forward with their offers, their value estimates can surpass the property’s expected or actual market value. This is one of the most popular methods of sale for commercial properties currently.

However, many first-time buyers may not be as skilled when it comes to tenders. Hence, they may hesitate to get involved. This means you will lose out on this portion of potentially interested parties. Before you list the commercial property for sale by tender, take that into account.

In addition, the waiting time between putting your home up on tender and closing might put off a portion of buyers on the lower end of the market. Renovation or relocation to a commercial property is typically much more demanding than residential properties. That is why most buyers want to wrap up the purchase as soon as possible. If you encounter a delay due to tender competition, it is best to find a company that ensures flexible and easy transfer to the new facility.

Sale by public auction

Finally, there is the sale by auction. The initial period of exposure of the listing on the market is most important. The sale by auction method takes advantage of the novelty of the listing and the interest it creates. The seller calls the shots here rather than the buyer. How so? The buyers have to conform to the auction terms in that there is a strict deadline for placing the offers.

Note that the advertising in this selling scheme is intensive in the first month or so. It is also very widespread. In most cases, the marketing goes beyond the state’s borders, sometimes even internationally. With that said, it makes sense to join a referral program that can connect you with experienced commercial real estate agents abroad. This kind of exposure will help you attract only serious buyers. This is one of the best methods of sale for commercial properties as it stimulates competition. Hence, it brings several benefits to your clients.

Written by: Lisa Robert with US Home Experts


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