Commercial Listings: $1 List Price

[Robert Maclellan]

Has anyone come across the $1 List Price on a deal?

Recent story: I have a client that has been looking for an office space for some time and finally the property that checked all boxes hit the market. I immediately reached out to the listing broker, who I know, and asked what they were asking for the property. He responded $7m.” The following Monday I tour my client through the property and it wasn’t the perfect fit, but it was good enough. Only 1/2 of the property was finished space, the other half was a complete shell. We were shocked they were asking so much for the property in this condition, however, it did include an additional 0.7 acre parking lot which included 100 spaces.

I gather with my client and write up the offer. We offer a little low to see how they react. Our offer was $6.55m closing in 60 days with $100,000 Earnest Monday hard after the 30 day inspection. To our surprise, the Seller rejects our offer and counters back $2m over the purchase price their broker quoted us. We were amazed and very furious. We offer again at $7m and they flat out reject the offer and give no reasoning. Their broker tells us “I’m sorry my client is smoking dope and have no rhyme or reason in their pricing.”

A week later I am talking with the neighboring property owner who forwards me an email from the same broker offering him the property before it hits the market. The email was one week before it hit the market and they were quoting him “estimated closing price: $ 6m.”

So, within a 3 week span, the property went from $6m->$7m->$10m. Has anyone encountered this type of situation? I am being told the appraisal is in the low $5m range. I’ve never had a broker quote me a price and have his Seller counter millions over the quoted price. Is this because of the market we are all experience? It makes me wonder how he can have an exclusive listing agreement and not have a price in that agreement.

Feedback welcomed!