Recently I received a call from a neighbor asking if I had any tenants that would be interested in leasing a 10,000 SF building that was owned by the City. She told me the City was considering leasing it to a group for $1/year and surely there must be a tenant willing to pay more. Of course the group had a philanthropic use that appealed to the City, but as details emerged it turned out the city had this building vacant and available for a long time, but no one really knew it was available. I had actually talked to the city about the building 7-8 years early, but they were not interested in leasing it at that time.
When many municipalities, governmental agencies and corporations are looking to sell property they have acquired (often through tax sale, foreclosure, or buyouts of other companies), they often put the offering on their web sites and nowhere else. As a full time commercial realtor, I periodically check various web sites to see if there is anything that might appeal to my clients. However, I’ve spoken to dozens of other agents that do not know about these sites or properties for sale. That means sellers are missing out on potential buyers.
When the buyer or tenant pool is small, the sale price ends up being low. It is similar to an auction with only one buyer. The buyer might be willing to pay more, but when there is only one person who shows up with an offer, the property is often sold at a lower price than it would have if there were multiple parties interested.
When I list a property, my goal is to give it the maximum amount of exposure. This includes putting it on every commercial web site available, the local MLS, property signage, emailing potential buyers and getting the word out to other brokers. Often it will be listed multiple ways - for sale and for lease and various size units for lease. In doing this, we are able to find the most potential buyers and tenants and realize the best price obtainable for the owner.
Statistics on “For sale by owners” (FSBO) are difficult to come by, but from what I have read the properties that do not get listing exposure usually sell for significantly less than the ones that have been marketed by a real estate professional. I realize the goal of the FSBO is to save money by not paying a commission; however they often end up with less money than they would have if the property had been listed. This is essentially what the municipalities are doing with their properties.
In the end, knowing how to find properties that are for sale on obscure web sites may offer some good buying opportunities for savvy investors. However, why a seller would choose to limit exposure to the market and not obtain the highest price possible, does not make sense to me. There will never be a substitute for good marketing when it comes to helping a seller get the best price for his or her property.
Dan Stiebel, CCIM
Dan Stiebel, CCIM