Don’t be fooled by an inflated business valuation

One of the quickest ways for a real estate agent to impress a prospective client is to propose a higher than expected selling value for their property.  Although many times the inflated value can be justified, too often it is without merit and simply being used as a ploy to obtain the listing.   Before selling, there are a few important concepts that every owner should understand about business valuations and pricing.

  1. If a valuation seems too good to be true, proceed with caution. A reputable agent will spend quite a bit of time digging into the financials of a business before proposing a selling price.  A valuation that cannot clearly be defended using a client’s income/expense statements is not worth going to market with.
  2. Pro-forma numbers are nothing more than an educated guess. Although they can be used by real estate agents to defend an aggressive selling price, proformas are not usually an accurate way to value a business.  Because they cannot be supported by a company’s financial statements, projected earnings often hold little to no weight with savvy buyers.
  3. Going to market with an overpriced property can do more harm than good.  Asking an unreasonably high price for a property just to “test the market” may deter the best prospects from even looking at the details of the listing.   Not only does it hurt the credibility of the listing, overpricing a property can significantly extend the time the listing sits on the market, making it even less desirable to potential buyers.

Don’t be fooled by an inflated valuation.  Choose an agent that you can trust.  With over 20 years in the seniors housing industry, Knapp Group agents have heard countless stories of owners being enticed by exaggerated listing prices that don’t hold weight when the property actually goes to market.  In the end, such properties sit with little to no activity until the price is dropped or the listing expires.  It is not only a huge disappointment to the owner, but also a waste of their precious time and energy.

Knapp Group has a proven and long-standing history of accurate business valuations, multiple offers, and some of the highest list to close ratios in the industry.

  • We average 4 offers per listing
  • Our average selling price is 95% of the list price
  • Our average selling price is 98% of the valuation price
  • We close 9/10 properties that we list


Contact us today for a thorough and accurate valuation of your seniors housing business.