A Place of Prosperity Pumpkin Pie
Year
September 28, 2014
A piece of prosperity Pumpkin Pie. By all accounts, the present-day market is surging with activity for sellers, buyers, and brokers. This 12th edition of Simon Says focuses on selling deals direct. Today’s sellers have options when dealing direct relative to what they are looking to accomplish. The idea of retaining brokers is sometimes a bifurcated blur. The value of representation either carries conviction for brokers as market makers or contrarian pushback for hiring overpriced paperweights. Some brokers can be viewed as order takers serving as interruptive intermediaries or lazy liaisons simply seeking a paycheck. Others can be considered hard workers who happen to be convenient conduits to consummating deals. And few are revered as valued relationships who offer consultative macro methodology by partnering to improve a client’s wealth position. Note valued relationships can also come in bulldog breeds who shape shift transaction tipping points with ardent negotiation tact and diplomatic damage control for directing deals. Yet no matter what the paradigm, the practicality of what sellers strive for is straight forwards: achieve a sale at virtually the highest net proceeds, to ideally the most hassle-free buyer, in relatively the shortest period of time.
A direct sale can theoretically result in a quick and easy fix. Certain sellers seek the comfort zone of dealing with someone they sometimes have transactional history with. Direct deals effectively defer broker commissions and in-turn selectively abstain from interaction with a high tide of buyer activity. Circumstantially this can be a requisite route for certain sellers making immediate moves while flying under the radar and slamming deals home. That is one way to slice it. Yet this approach can prompt questions relative to serving the best interests of sellers:
Does the seller have a good idea of what the market is withholding from their piece of the prosperity pie? With or without commissions included?
Consequently, was the property presented with maximum exposure to the full investment spectrum? Or was it cascaded from where the top of the market could have been reached?
Was the very best competitive set of buyers, both private and institutional, bidding against each other or absentee in the process?
If activity is missing, the void can be filled when the property is cloaked with national exposure and deliverability. Investment brokerage groups on national platforms such as The Jonna Group exist to best position assets in the $1-$30 million range, the most broad-based sphere of categorically chased deals. The art and science of a proven brokerage platform offers a culture of information sharing and open market bidding. This connectivity can result in a five card draw show-down of bluff and hold players who either ante up or fold. The competition becomes your ace in the hole insurability, once the cards are dealt and the pot is sweetened, Capital migration is the steppingstone for private and institutional capital stack stimulation, that stems from state to state lines. Massachusetts based deals with Missouri based sellers can trade to Illinois based buyers who happen to be represented by Georgia based attorneys. A common case scenario within M&M company walls.
What this Means to You:
Deals are born in different scopes and sizes. Short term and long term. Neighborhood or national. Credit or creditless. Net leased or not. Some deals garner the interest of the mass market. Others only select buyers. Yet direct dealing can either inhibit multiple buyers for sought after deals or one or tow necessary buyers for steeper deals. If an off-radar procurement of your property is available to one sole buyer then your deal becomes low hanging fruit, to the benefit of the buyer. Granted there is no misguided or outward assertion arbitrarily ruled out if in certain cases listing are not needed or sellers prefer to market deals on their own. No matter what the approach, pipelines demand forward progress not hindsight timelines of delayed deals. Unfortunately, some episodes translate into less pricing preservation. That said, the thought of listing a property can prove to either be cliché or critical, depending on how you carve your piece of the pie.
“Some people want it to happen, some wish it would happen, others make it happen” – Michael Jordan
