Choosing a Broker

Choosing a broker to sell your property is a very important decision. There have been studies done where they have asked sellers: what are the key points that you looking for in a broker and what are the qualities that make a top broker that you can trust? So as a seller I’m going to give you a list of things that you should be looking for in a broker. First and foremost you want and honest approach to the value range of your building that’s achievable in the marketplace today. It’s easy for a broker to give you an unsubstantiated higher price just so that they win the listing. This can come back and bite you. What you really want to see is a proper thought process that the broker goes through, looking at the location of the building, the condition of the building, the current financing on it and the demand in the marketplace. Now we’re in a very unusual time here.

Most apartment sales are at record prices, so sometimes looking in the rearview mirror at apartment pricing may not be the best way to go. It’s a bit of an art and a bit of a science, but you need to have a good talk with your broker to see that you got the most honest evaluation on what the prices is. Not too high a price, not too low a price. If you say too high a price, people just won’t look at it. And if you charge too low a price, well then, that problem is obvious. Number two. You have to get the broker to demonstrate how he’s going to get that price from his database. Does his database support the pricing range that he suggested? If you’re selling to a long-term buyer they’re going to be much more interested in the internal rate of return. If you’re selling to a syndicate or public company, they’ve got to have quarterly dividends so they’re going to be much more interested in the immediate cash flow and the cash on cash return. You have to make sure that your broker has a database of sales of the different types of buyers that reflects the different capital cost structures that are out there. The third point is that you have to have a depth of database. At ROCK we have built the most comprehensive, and the most robust database in the business. We’re happy to demonstrate it to you over a go to meeting session, and there’s also a video that we made on a database that you can watch. The fourth thing that you have to look at as someone selling a building is: does your broker have the ability to create something that we call “buyers stretch”? What will your broker do, and what sales skills does he have to get the buyer to stretch? If you have multiple offers how do you use your broker to help you choose the best offer to get the highest price? So this concept of buyers stretch is the ability of your broker to get you that extra half-million dollars. Number five is: what’s the quality of the buyer? Does the broker have a systematic approach to qualify the buyer? At ROCK we qualify the buyer based on his previous acquisitions, his reference checks and we’ll talk to people about your buyer before we make a recommendation to you to help you make a decision on which offer you should take. Number six – does the broker have a defined process timeline? You are about to enter into a process that’s going to take several months. Your broker should clearly articulate the process and the timeline from pre-listing to sale. We’ve got a number of videos on this and a lot of information we can show you the exact time lines the deal should take. This is not cast in stone, but at least they’ll give you a sense that the broker has a plan to get from here to there. Number seven. Meet the broker’s team. Today most apartment buildings are not sold by individuals, they’re sold by a team of people. We recommend that you have a face-to-face meeting with the sales representative and the team backing him up. Is there real experience there? Number eight – we call this “deal swagger”. It’s an interesting term…Is the deal team competent? If the deal team is full of fourteen year olds that’s going to get you one result that might be very technical and very computer oriented, but it may not be the real world experience you need to get the deal done. Finally number nine. Call it what you will. There’s just a feeling you get from the Broker, his company, and his team and they’ve demonstrated to you – showing you their systems – that they’ll be there for you to get the deal across the goal line. There are many good brokers out there with many different styles. At the end of the day as a seller you should choose the broker and team where you feel comfortable with them and they can demonstrate to you parts of the sales process. Parts of the sales process are intangible you can’t measure them – but as an apartment owner you’ve been through a lot. You’ve seen all kinds of different people in your career, had all kinds of different tenants, you’ve borrowed money, bought buildings, sold buildings – just trust your judgment. Look at the brokers opinion of value, see how the broker has laid out the deal, look at their database, and from all that information you should be able to make a good decision for yourself and get the best price for building.