They say that breaking up is hard to do, but for many, knowing that it is time to part with one’s land or commercial real estate … well, it can be really hard!
Having worn many hats in my real estate career (broker, buyer, tenant, seller, landlord and developer), I thought I’d share some insight I’ve gained from all those hats I have collected over the years.
Whether your property is a tract of land that you have owned for years, an income producing building, or a property that houses your business, at the end of the day, you can’t take it with you. It’s just an asset that is part of your portfolio, and for whatever reason, you have decided to sell it and move on.
Many of the clients with whom I have worked over the years often need one of more (sometimes all) of the following tips of advice, as they prepare to place their property on the market for sale in hopes of achieving a successful sale. Please excuse me as I use a few very trite phrases!
1. Fall out of Love:
Many property owners have had a romance with their real estate. Maybe it was love at first sight and had to have it; or bought it and grew to love it as their investment and/or sweat equity increased. That pride of ownership and accomplishment can blur one’s vision to the realities of the marketplace.
Just as love is blind and young lovers find no fault in each other, some property owners are not willing to face the fact that others may not appreciate how much time you have spent with that tenant that you have nurtured over the years, or that old furnace that you have refused to replace because it works perfectly now.
It’s time to leave your infatuation behind, stare reality in the face, and see the property through the eyes of a buyer.
2. Seek Unbiased Advice:
Part of the process of falling out of love is also allowing an unbiased third-party to provide a second opinion as to what a buyer may see. This may come from an experienced appraiser or a commercial real estate broker, who knows the marketplace well … Not your next-door neighbor or son-in-law … I’m talking unbiased.
That opinion can often yield pleasant surprises and sometimes not … but the deal is to get real with the market value.
3. Find a Master Marketer:
To many sellers often try to be Penny Wise and Pound Foolish with the approach they take to selling their real estate, by trying to do it themselves or engaging the broker offering the lowest fees.
The goal that I often recommend to my clients is to establish a goal – no matter what the market conditions are – to strive for multiple offers to be delivered at the same time.
How does one do that?
Find a broker who knows the market inside and out (comparable sales, current inventory and a keen knowledge of buyer types) and who is capable of providing candid marketing tips to prepare the property for sale. This broker must have a track record of using a multimedia approach to reaching qualified prospects. In addition, the ideal broker must be able to represent the seller’s interest at all times and know how to bring a deal to the table … as they say.
4. Don’t Try to Fulfill a Fantasy:
In today’s world of properties that are still over financed from the fantasy years of 2005, many owners still try to hold on the idea that they can yield big bucks from a sale based upon the offers they received over a decade or so ago.
Yes, it may be true that the debt and or the debt service is draining an owner’s resources, and something must be done, despite that fact that a sale may not yield the funds one needs to sail off into retirement with a wad of cash.
At the end of the day, there are investments that have turned out good and those that went bad through no fault of the investor.
Heck! Just blame it on the economy or your most unfavorite politician … if that makes you feel better. At the end of the day, unrealistic dreams and fantasy don’t pay the bills, unless you are George Lucas. It’s about reality.
5. Surrender to the Process:
This is often the hardest part, as many sellers still try to hold on to their emotional attachments or the plans they have made for the fantastic net proceeds they dream of coming from a sale. Micromanagement can be deadly.
While it is vital for the owner to come to an understanding of expectations with the professionals they have engaged and monitor that process, it is still about the realities of the market and find the right team to carry out your plans.
If you find yourself having problems with any of these 5 tips, take a moment to give us a call us at MacRo, Ltd. … maybe we can help.
Rocky Mackintosh, President of MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland, has been an active member of the Frederick community for over four decades. He has served as chairman of the board of Frederick Memorial Hospital and as a member of the Frederick County Charter Board from 2010 to 2012. He currently serves as chairman of the board of Frederick Mutual Insurance Company. Established in 1843, it is one of the longest enduring businesses in Frederick County.