Get the Maximum $$$ by Deciding on Highest and Best Use

You cannot have great results in your garden until you decide what you want to plant. AND, likewise - You can't sell unrestricted property at the highest and best price and terms unless you first determine the highest and best use of the property.

This analogy may sound a bit facetious when it comes to marketing and pricing real estate - but I believe it rings quite true. Let me see if I can give you a few examples that may drive my point.

There is a piece of real estate currently on the market that I would love to get the opportunity to sell. It is listed by another agent so I cannot share specific information about this property. But it could be a dozen other properties that suffer from the same predicament. This listing has been on the market for more than a year - with two listing agents doing what they feel is right to sell the property.

Location is excellent because it is less than a mile from a highly restricted and highly desired community. It does not have frontage on a major road, but for the appropriate buyer that would be an advantage. It has more than 15 acres of unrestricted land with 5 acres of it a tranquil, scenic pond. The home was built more than 3 decades ago, so many prospective buyers would eventually pull down the house because it does not serve their purpose. The 6 rental units (mostly mobile homes) are very limited in value to most prospective buyers.

OK - I might get myself into trouble here, but I am going to say it...
These listing agents have done it all WRONG!

The way this listing has been presented to the market is only slightly different than it would be marketed if it were in a remote location, poor neighborhood with bad access issues. The descriptions describe the residential and current cash flow benefits of the property. Yet the price is far above the range that would justify purely residential use. The method they are using is like planting green bean seeds and hoping that someone will pay them the price of endive.

I remember 14 years ago when I was learning commercial real estate around the conference table with some of Montgomery County's greatest commercial agents. One of the basic principles that was repeated over and over again is that you cannot establish a price or a marketing strategy until you have determined the "highest and best use" of the property.

I invite you to share your opinions about what the highest and best use would be for this property. I am thinking corporate training center, spiritual retreat, holistic healing community. The most likely buyer will be someone that wants the peaceful surroundings, yet places a high value on the fact that it is very near the face paced lifestyle of the nearby community.

What do you think?

BTW: If you might need a property like this, I can represent you as a buyer. If you own an unrestricted property in the Greater Houston area, contact me for a comprehensive Highest and Best Use Analysis.