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Selling Self-Storage in a Soft Real Estate Market

Michael L. McCune Comments
Continued from page 1

Often, brokers hear a potential seller say, “I will sell if I can get my price.” In essence, this means he is not really a seller. This owner either wants an excuse not to sell or is simply deferring what should be a rational decision to the erratic notions of the market.

A potential seller must truly be serious about engaging in the selling process. As we shall see later, putting your property on the market without the serious intent to sell can actually hurt the property and your ultimate ability to sell it effectively.

What’s It Worth?

You’ll have to find out what your property is worth in the market before you decide to sell it. Don’t forget, the market determines what the project will sell for, not the seller. The potential seller can determine whether or not he will sell for the market price, but he cannot change the market. This is particularly true in difficult markets like we are currently experiencing.

Although a property could sell significantly above the market price, most real estate professionals would agree that they’ve never seen such a sale, particularly in a relatively small market like self-storage. Pricing the property incorrectly means one of two things:

  1. Either you lose money because the price is too low, or
  2. You lose money because the price is too high and it won’t sell!

In soft markets we often find “predatory buyers” who spot sellers with properties well priced above reason and then make a lowball offer, leaving it causally “on the table” for the seller to ponder. They know that the property will not sell at the high price, but if the seller winds up in a difficult situation (expiring loan, for example) and is forced to sell to the only offer on the table, he will regret not listing it at a market price.

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