The Price Went Down!!!

dave20063
Aug 12
4 min read

“The Price Went Down. Should You Be Excited? And Why Would a Seller Ever Raise the Price?” & Market Update

44000 SQ ft of Warehouses Sold !!!!

After a Price Increase!

Each week I look at the commercial real estate listings sent from the board office to see what's new, what has sold - so I can help my clients pick appropriate pricing and also look closely to see what prices have changed to see if there are deals to be had for my clients.

You can Check them out here for yourself. (These are the latest listings for the past 30 days)

New listings

Sold Listings

Price Changes

Today we are talking about price changes because price changes are often misunderstood. A price reduction isn't necessarily a sign that something is wrong, and a price increase isn't necessarily greed—it can reflect new information, improved positioning, or a change in the seller's strategy. The truth is that the market is constantly providing feedback, and smart sellers and buyers respond to that feedback.

So let's get down to it. Why sellers reduce the price:

Over the years there have been many times I have encouraged people to reduce their prices. This is for a number of reasons, sometimes it's been because I have made a mistake in my valuation of the property or business, but often it's because the market has changed. In many cases when creating a valuation for a business or property I give a range of value and oftentimes my buyers choose to go at the top end and sometimes even higher. This is fine when the market is hot but pricing on the top end usually but not always leads to a property sitting. Here are some other reasons why sellers reduce their prices.

The property has been on the market longer than expected.
There have been plenty of showings but no serious offers.
Buyers are consistently indicating that the price is too high.
An appraisal or broker opinion suggests a lower value.
Interest rates have changed and affected buyer affordability.
The property's income has declined.
A major tenant has left or a lease is approaching expiry.
Comparable properties have sold for less.
The seller's circumstances have changed and they need to create a sale.
The original asking price was based more on emotion than market evidence.
The property needs more capital investment than buyers initially expected.
The seller wants to generate multiple offers by repositioning the property.

Why sellers might increase the price:

Recently I had a property that had been for sale for a while where I had an offer from a buyer who was struggling to close the deal. I felt that the market had changed and as a result suggested that we relist the property at a higher price. Within days I had two offers and the listing sold at a price several hundred thousand dollars more that the previous offer. This doesn’t always happen but it can. Here are some reasons why you might want to raise your price.

The property has received significant interest or multiple offers.
The seller has improved the property.
Rents have increased, improving the property's income and value.
A new long-term tenant has been secured.
The business's financial performance has improved.
New development or zoning opportunities have been identified.
Comparable properties have sold at higher prices.
Interest rates have improved, increasing purchasing power.
The seller initially underpriced the property to generate interest.
Market conditions have changed since the original listing.
New information has revealed additional value—development potential, excess land, parking, expansion opportunities, etc.

The difference between changing a price and changing the strategy. Sometimes a $200,000 reduction is exactly the right move and I have seen it spark interest in a listing. Other times, the right answer is actually to increase the price because the seller has discovered that the property was undervalued. In my most recent sale of a building that the price increased it was the result of increased leases and the fact it was fully rented.

They say that pricing is an Art not a Science, and while I am not a great artist I have been able to sell some properties that have struggled to sell for years before. Perhaps I am lucky, but more likely its the hard work that my team puts in to making sure that every listing we have gets people interested. I believe that there are buyers out there but they need to see value and its my job to help them find that value.

Let me know if you want to have a coffee discuss any of this.

Dave Fuller, 250-617-7467

Check out my Listings Here including:

Industrial Land for Warehouses, Storage Units!

2 Esso Gas Stations

If you want a couple great gas stations including buildings, businesses and land. This is your Chance. $19,500,000 for Both together. NDA Required Here.

Development Property Residential:

5 Acre Building site Northside Crossing for 225 Housing Units! Here

2 Residential Lots in Fort St James 20k each or 40k for 2. Bring a Creative offer! Get the Package.

10 Lot Potential next to a Golf Course in PG only $499k Here is the package

Businesses? I have a couple that are quietly listed for qualified buyers. Reach out to me for a quick chat if you have some interest.

Check out my other development lots on the website. www.nbccommercial.ca

Reach out to Me if you want more information on any of these I am happy to sit down with you and discuss. Also let me know if you want to talk to a banker who will finance you. I know several who have told me that they would be happy to give you a quote.

Have a great rest of the week!

Dave Fuller, MBA, Commercial Realtor

Team Powerhouse Realty

dave@nbccommercial.ca

250-617-7467

10 Reasons Why Your Commercial Real Estate Deal Might Collapse

. Check out the blog

Here is the Article