Advertising and marketing are the only ways to get many people interested in a commercial property in a short period of time. The more that people know about the property, the greater the chances of someone liking it and wanting to buy it.
When you can get people to like a property, the higher the asking price can be, and the greater the potential for a genuine inquiry.
Although some commercial real estate companies pay for the advertising themselves (and the vendor gets what he or she pays for—little or no advertising and poor results).
Anyone could put their property up for auction with an impossible reserve price and no intention of selling for a free market valuation. That leaves the agent with all the cost and no sale potential. Top real estate agents don’t do that.
Genuine sellers of property are required to spend money as part of a vendor-paid marketing fund that is tuned to the target market of buyers. That is a formula that must apply to all real estate transactions.
Genuine Sellers
A joint effort and a business transaction go into selling a commercial property. A genuine seller is one who spends money to make money. Advertisement funds are given to newspapers in exchange for the vendor’s AGENT SERVICE, EXPERTISE, LOYALTY, AND BEST EFFORTS.
If a commercial real estate auction company paid for each property on their books (say, 500 properties), their classified advertising costs would exceed $50,000 per week! The cost of display advertising could be ten times this amount. They would be out of business in no time.
Advertising Spend
In choosing an advertising budget, the vendor should carefully consider what the advertising is required to achieve. The more advertising that can be done, the better for the client; more people will know of the property and its availability.
THE CHIEF CONCERN OF A VENDOR SHOULD BE TO FIND A SOLUTION TO THE PROBLEM OF HOW TO GET FULL EXPOSURE IN ORDER TO ACHIEVE THE MAXIMUM PRICE FOR THE PROPERTY.
Individual advertising budgets in commercial real estate are tailored for each property. Agent’s commission, legal fees, and advertising costs are often paid for in just one higher bid at auction. (As a guideline, adequate advertising costs should be approximately 1% of the value of the commercial property being offered for sale.)
