Business FSBO: Commercial real estate gents advise against.

• Author: Sergeant, Deborah Jeanne
• Position: REAL ESTATE - For sale by owner

[ILLUSTRATION OMITTED]

[ILLUSTRATION OMITTED]

[ILLUSTRATION OMITTED]

Like many consumers, businesses are trimming their budgets these days. Some liquidate real estate to downsize to smaller or more affordable digs. If you're considering selling property "for sale by owner" (FSBO) to avoid paying a real estate agent a commission, you may see some immediate savings, but you should be aware of the disadvantages of going it alone.

MORE BUYERS

"You will get much higher exposure listing with a real estate broker," said Ray Metcalfe, owner of Metcalfe Commercial Real Estate in Anchorage.

Real estate agents use online tools and databases unavailable to people selling FSBO. They are also more aware of who's in the market for buying commercial property. Better exposure usually means a higher selling price because of the greater "competition" among buyers.

"The likelihood that one will get as good of a price on their own versus [with a broker] is slim," Metcalfe said. "It can happen, but it's slim."

He estimates that it costs FSBO sellers 2 percent to 4 percent less in advertising overhead than paying commission to an agent, but "a well-experienced, reputable agent earns the additional 3 percent it costs you," he said. "If you're paying a 6 percent commission, you'll get at least 3 percent of that back."

TOP DOLLAR

Stuart Smith, a commercial real estate agent with Keller Williams Realty in Anchorage, believes using an agent "adds value to the sale. I see numerous properties that are for sale by agents that bring top dollar just because the agent brings top dollar, unlike what an owner would."

Smith has been a commercial real estate agent since 1981.

Selling a property isn't cheap. Beyond the expense of advertising, simply having a commercial property appraised runs approximately $3,500 to $5,000, but since it's not obtained through a broker, it isn't valid for commercial financing. Instead, many people selling their own properties obtain a broker opinion of value to get an idea of their property's value.

"If they're one to 2 percent off the listing value, that's not a crisis, but 5 percent is a huge deal," Smith said. "They want someone who's competent to give the best property analysis or valuation they can."

A broker can also represent the seller to the appraiser to point out features of a property that should add to its value. Asking too much for the property can drive away potential buyers and drag out the process; asking too little may move the...