Seller's Position Compromised?
This week an apartment owner shared an experience selling a multifamily community with a well-known brokerage firm specializing in apartment sales. The brokers agreed to market the property broadly and set a call-for-offers date. However, the date was never set and the broker began to trickle in a few offers from what he described as the “best buyers” in the market. The top offer they produced was 24 percent under the list price; they suggested the market had spoken and the seller should accept it. The seller took the brokerage team’s advice and went under contract. After inspection, the broker reported that the so-called best buyer for this type of asset asked for a further price reduction of 15 percent. The seller was unable to relinquish the property at the reduced price and the sales agreement was cancelled.
After two months of sparse offers and showings, a broker with another firm, which isn’t apartment focused, found out the property was on the market and sent in a full-price offer with a quick, clean closing to the listing broker. The listing broker advised the seller that it would have to pay both the selling agents and listing agents fees, i.e., that they were not going to share their fees. Upon further investigation, the seller found that none of the other brokers in the market were made aware of the property’s availability. The property listing was only emailed to a list of their direct buyers. The property was not promoted in any other marketing systems and, if other brokers did somehow find out about it, the listing broker would not share their fees with them.
Was the seller’s position compromised by these broker practices? Absolutely. Unfortunately, while this happens in all property sectors, the apartment sector brokers are the worst culprits of these types of tactics. Apartment sellers are hurt by this practice every day. If the property had been marketed in multiple systems with a broker known for compensating all brokers, the property would have sold for full price or maybe more, saving the seller time and money. If the property had closed at the price the broker initially suggested was the best price achievable, the seller would have left 39 percent of the value on the table.
This lack of proper marketing exposure and broker cooperation, in addition to the refusal to compensate the cooperating brokers, is why Bull Realty was created 15 years ago. Bull Realty was designed and is growing market share based on full cooperation with the entire brokerage community nationwide. It was created to 1) provide a company of stellar reputation and b) provide the best marketing in the nation.
Experience the difference that real high-exposure national marketing, powered with full cooperation and compensation with the entire brokerage community, will make on your returns. Contact Bull Realty to sell apartments, land or any commercial properties.
Michael Bull, CCIM is founder of Bull Realty, Inc, a U.S. commercial real estate sales and advisory firm headquartered in Atlanta, and the host of the nationally syndicated Commercial Real Estate Show. You’re invited to connect with Michael on Twitter and LinkedIn.
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