LFC Offers an Alternative Selling Strategy

We are in the midst of an extraordinary economic slowdown which is forcing many real estate developers and investors to sell into depressed markets. With a gloomy outlook that could last several years, sellers really need to be resourceful and think outside the box of traditional brokerage. Sales transactions at most of the nation’s largest brokerage houses have screeched to a halt. Veteran CBRE economist Ray Torto recently spoke at an industry professionals meeting in Orlando, and he expressed his concerns that “the current slowdown is more similar to the Great Depression” and warned “that the nation’s commercial real estate downturn is already worse than the 1991 collapse and shows no sign of abating.”

LFC offers an alternative selling strategy – online auction. The pain sellers feel by constantly reducing their asking price time and again, just to realize they waited too long and the market has outpaced them, is overcome by the nature of an auction. An auction sets the price low – low enough to gain interest from potential buyers - and then allows the bidding process to push the price to the highest amount the market can bear.

Following the market down is a mistake, it is important to get out ahead of the wave of commercial properties expected to saturate the market in the next several years. Dr. Sam Chandan, President and chief economist at REEcon, a real estate advisory firm located in Washington DC, predicts that “default rates for commercial real estate loans will continue rising over the next few years, reaching 4.7% in 2010 and finally arriving at a peak of 4.85 in 2011.” Tony Villasenor, senior vice president at Voit Commercial, a commercial real estate firm believes, "These are going to be the toughest times we've seen since longer than I've been in the business, which is 27 years,"

LFC cannot create demand, but it can focus all the existing demand in a market on the property being auctioned; the highest bid at the end of the day is a pure appraisal for the property.