May 1

Top 5 Reasons Commercial Properties Don’t Sell

As you can imagine, several reasons can prevent a parcel of commercial real estate from being sold. However, among those myriad problems, are five which are the most common causes that prevent commercial properties from being sold.

If your commercial property didn't get sold, or if you're considering the sale of your commercial property, you'll benefit from this article.

By the way, the information in this article applies equally to leasing commercial property.



Number 5 - Poor Advertising

Unless prospective buyers know that your commercial property is for sale, your property can't be sold. And, the only way those prospective buyers are going to learn about the availability of your property is through advertising

Properly advertising a property in the media most appropriate for that property type is one of the most important reasons why a commercial property either sells or fails to sell.

Number 4 - Difficulty Showing the Property

Difficulty in showing a property is one of the top reasons why a commercial property doesn't get sold. And, while one may first think the cause of this difficulty may be due to an uncooperative listing agent (which is sometimes true), there are other reasons why it's difficult to show a property.

For example, there may be times when dangerous activities are taking place on the property that would be hazardous to visitors.


Another example is that the seller is being intentionally uncooperative. And, a seller's lack of cooperation can have several different causes, from disagreeing with their listing agent to not being fully committed to selling the property.

Regardless of the reasons, the fact remains that difficulty in showing a commercial property typically results in few, if any showings, and concludes in the property not being sold.

Number 3 - Negotiating Skills

One of the most common reasons why a commercial property doesn't get sold is because of the poor negotiating skills of one or both of the real estate agents.

There are many types of negotiating approaches and techniques that can result in a successful conclusion. But, there are a few basic rules that are common to every successful negotiation.


While I'm not going to get into a dissertation on how to conduct a successful negotiation, I will say that negotiating to reach a conclusion that satisfies both parties in a commercial real estate transaction requires, 1) vast knowledge of the intricacies of commercial real estate, and 2) having extensive experience in successfully negotiating with a wide variety of personalities.

In the end, when both real estate agents are skilled negotiators, each may not get everything wanted by their respective client. But, they will almost certainly satisfy their respective client's most important requirements. However, when one or both real estate agents lack negotiating experience, it will likely result in a poor outcome for one or both parties.

Number 2 - Agent Cooperation

One of the most important ingredients in the creation of a successful sale of a parcel of commercial real estate is the listing agent's willingness to reasonably cooperate with other commercial real estate agents.

Reasonable cooperation with other commercial agents includes:
1. Assisting in making appointments to show the seller's property to their buyers.
2. Answering questions about the status of the property (e.g. Whether or not there are existing offers; If the sale is contingent on the seller's relocation, etc.)


3. Provide insight into the seller's willingness to consider holding part of the purchase price in the form of either a first or second mortgage, the seller's preferences concerning a closing date, and other things that can help to eliminate wasting time dealing with undesirable and unwanted issues.

Consequently, the lack of cooperation by the listing agent with other commercial real estate agents is one of the top reasons that significantly reduces the probability of consummating a sale of that property.

Number 1 - Pricing

As you can imagine, among all the reasons why a parcel of commercial real estate doesn't sell is the same number one reason why any parcel of real estate doesn't get sold, which is because its offering price is so high that it tells prospective buyers that the seller isn't serious about selling.

However, the problem of over-pricing may be the fault of the seller's real estate agent rather than the fault of the property owner.

In today's commercial real estate business there is a large and growing number of new and "cross-over" agents (a cross-over agent being a residential real estate agent trying to break into the commercial real estate business sector).

In both cases, neither of these types of agents has the requisite knowledge and market experience necessary to form a reasonably well-supported opinion of the value of a commercial property.

And, while some new commercial agents work under the direction of an experienced commercial broker or agent to help them to properly and ethically serve their prospective seller clients, many other new agents and most cross-over agents tend to try to "fake it 'til they make it," which typically does more harm than good for their unsuspecting seller clients.

Contact us for a complimentary and confidential conversation to learn how we can help you get your commercial property sold.

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