Have you ever made a decision based purely on instinct, even when conventional wisdom is telling you to do otherwise? Take golfing for example, picture yourself 150 yards from the green, the club of choice is a seven iron but for some reason, you choose an eight iron. You know it might not be the right club but you hit it anyways, and guess what, the ball lands on the green and rolls right into the hole.
Sometimes in life, instinct trumps the “right” decision and this is equally true for commercial real estate. Recently we sold a small industrial / office building at a significantly higher price than the appraised value, something that rarely happens in this industry.
Based on comparable sales in Mississauga and in the complex, the appraised value was $875,000. After some contemplation, the owner wanted to list the building at $1,000,0000. There was no rational or analytical analysis, he just had a feeling his building was worth more than the appraised value, and we believed him.
Within three days of the building being on the market, the eventual buyer toured. Within ten days, we had a conditional deal at $960,000. The sale closed at $85,000 over the appraised value.
When a property is listed sometimes you never know what can happen, and a qualified real estate agent can help you distinguish between an instinctual bet and wishful thinking.
There are a lot of factors that determine when and how much a building will sell for. Sometimes you just don’t know who is in the market and what they’re looking to buy. If the appraised price of your building just doesn’t seem right to you, take a chance and list it for the price your gut is telling you, you might just be right.