There has been lots of discussion in the last few years about new options for residential home sellers. People who want to sell their homes privately without an agent now have access to things like appraisals, legal help, and even MLS listings. Even in the traditional real estate world there is more innovation than ever before. However, there has been little talk of how new laws and emerging technologies could impact commercial listings. Here are 4 reasons why the traditional commercial real estate model is set to change:
1. Buyers and sellers will have more access to information
The Internet has changed how buyers and sellers interact, giving both parties a slew of tools to use in making their decisions. In the coming years, things like open access to sold data and virtual appraisals will make it easy for buyers and sellers to agree to a fair price. Also, listing platforms that including demographic information about the surrounding area will help potential buyers to make smart decisions.
2. Private Sale Options Will Become More Prevalent
Up until now, there has really been no private sale commercial market. One reason for this is that previously no good options existed -- sellers either hired a commercial realtor, or tried to find a buyer on their own. Another reason is that commercial investors are more savvy and informed, making it more difficult to sell for full market value without professional help. This is changing thanks to new laws and the emergence of private sale companies that offer a more professional service for private sale commercial listings. Perhaps the biggest change is that commercial listings can now be listed on the ICX (the commercial version of MLS) without hiring a commercial agent.
3. Traditional Agents Will Become More Specialized
What happens often in a traditional commercial transaction is that the buyer and seller are both experts in their industry, and know more than an agent does about whether or not a commercial property is a good investment. A good example of this is a print shop business that is being sold. Both the buyer and seller will be experts in the print industry, will know the value of the printing equipment in the sale, and are more comfortable negotiating with each other directly. Agents will have to focus on specific industries and markets in order to provide value to their clients.
4. Corporations Will Drive Change
Many commercial listings are owned by corporations, and not owned by individual sellers. Often these companies own dozens of commercial properties and even have full time staff that manage these properties. When these corporations have investors or shareholders, they have to demonstrate fiscal responsibility. Since they already have staff who are experts in real estate, things like private sale commercial listings will become more popular. This in turn will drive traditional agents to offer better and more specialized service.
Until now, the lack of innovation in commercial real estate has led to limited options for both buyers and sellers. This will start to change as technology and law changes have paved the way for innovative companies to offer similar services for a fraction of the cost. In the end, this will mean more options, lower cost, and better service for commercial buyers and sellers.