FAQ Series

I have an offer already. Why should I list and market the property?

This is very common for owners of multifamily properties in Los Angeles county. Just like brokers who constantly call you trying to earn a listing, there are buyers out there who will solicit you in order to buy the property without the seller having a chance to market the property and sometimes without any broker representation at all. The allure of these “off-market” buyers is the perceived savings the seller will receive by not paying a broker’s commission. However, research proves that the desired result of a higher NET sales price by not paying for proper representation has the opposite effect on your NET sales price, and these savvy “off-market” buyers know that.

These sophisticated and aggressive buyers understand that it is not in their own best interest for the seller to list and market the property. They do not want to compete with the thousands of other buyers looking for the same type of investment, therefore, these “off-market” buyers very often will “tell you what you want to hear” in order to bind you into a legal contract. They will give you a great offer on paper so that you legally commit to their offer alone. All too often do we see this strategy from aggressive “off-market” buyers, that they will put a deal under contract, only to later re-negotiate price and terms since they will know there is no competition. Once they have a deal under contract, you are not legally allowed to negotiate with any other buyer, and therefore the buyer gains the upper-hand in future negotiations.

An important principal to understand is that negotiations do not stop after the original purchase agreement is signed. Negotiations are an ever-day thing when selling real estate (especially multifamily/commercial), and it is imperative that you have qualified and experienced brokers who have gone through hundreds and hundreds of transactions and how to keep a buyer to stick to the original agreement and not use his/her power to re-negotiate down the line.

Now, on the other hand, if you do choose to market the property, especially with the highest quality brokers like the LA Apartment Advisors, you will ensure that your property gets exposed to the masses. Remember, we are in Los Angeles! One of the most sought-after cities for real estate on the planet. There is a seemingly unlimited number of buyers out there who will want there shot at giving you an offer. By hiring a professional and trustworthy broker, you will maximize the amount of offers that you will receive, and in turn, you will achieve the “auction-like” environment that sellers seek which leeds to market leading and record-breaking sales prices.

Lastly, if you are selling your property in order to do a 1031 exchange, it is paramount for you to understand that the “terms” of the buyer’s offer is almost as important as the price. With proper broker representation, you can ensure that ultimate buyer we choose to accept has been properly vetted, with proof of funds and a schedule of real estate owned, and more importantly, the buyer has given us the most favorable terms possible to ensure a successful and stress-free 1031 exchange.

Key takeaway: “off-market” is “below-market”. When you are buying real estate, the best deals are often found off-market. When you are selling real estate, always market the property using experienced, skilled, and trustworthy representation!