Last week an out of state customer asked me to e-mail him some commercial listings between 1.5-3 million dollars. I picked a few properties which suited his needs from the commercial properties data base and e-mailed him. He wanted more info on three properties, so I called the listing agents. One of the listing agents promptly went on to tell me that the seller had changed his mind about the price and wanted a million dollars more than the price which was listed in the data base. He went on telling me that this is due to the seller’s difficulty with finding a replacement property. Please note the lack of any logic behind this method of pricing a property. And that nothing has happened in Las Vegas in the last few weeks to justify the price increase.
It is imperative that sellers understand that the seller does not price a property, the market does. Everything on this earth is at the best, worth exactly the highest amount someone else is willing to pay for, contingent on the seller’s ability to reach the highest paying buyer. For example if the highest amount anyone would pay for an acre of land on Las Vegas Boulevard was $10, an acre of land on the strip would be worth $10, regardless of the fact that the seller paid 20 million dollars for it. The stock market best exemplifies this; a stock that was worth hundreds of dollars could go down to 10 cents.
It is a part of a REALTOR or a commercial real estate agents fiduciary duty to help the seller with pricing the property realistically. While it is always best to have an appraiser price the property, appraisals are obtained using the data from closed transactions. One needs to keep in mind that the offers on these properties have been made months ago and the market may have moved up or down since. Prevailing market conditions need to be factored in the pricing.
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