Overpricing/Underpricing-- Overpricing means that the building may sit on the market for a long time, as it languishes on the market, Buyers see that it has not been sold and assume that either (a) It isn’t worth it and/or (b) that there is something wrong with it. Even if they still want to buy it, their offer price will be well below what could have been negotiated when it was new to the market.
Non-verified information-- Get all bills, costs, and rents verified in writing. People are more litigious now than they have ever been. If you give them bad information, they can sue after closing and likely win. The cost of defending a Provincial court action is generally counted in the tens of thousands before you even see the inside of a courtroom.
Defects to disclose or not to disclose-- that is the question. You want to present the building in the most positive light, but there are some things that must be disclosed in writing, otherwise you will be spending a lot of time and money in court.
Environmental-- Banks and trust companies require phase 1 environmental studies to finance. It is much more cost effective to attend to matters prior to lender, appraiser and inspector scrutiny . Once something is known, to deny it later opens a Seller to legal damages for remediation and misrepresentation or fraud.
Financing and pre-qualification-- Most banks do a poor job in prequalifying Buyers. Is a Buyer prepared for the sticker shock when the appraisal comes in on lending value? Lending value is generally approximately 10-15 % under market value. The banks seldom explain this to the Buyer, and now the Buyer wants to drop the price by 10-15 % after tying up the building on condition for weeks.
Under marketing-- Placing a few ads online or in the local journal is great, but remember Economics 101. The higher the demand for a product, the higher the price.
Poor presentation-- Buyers love numbers and data. Graphs, analysis, and projections particularly appeal to the mind set of this group. Making a professional presentation to them and their partners will make a difference in price.
