Why You Need Exclusive Representation When Selling Investment Real Estate

This post is the third in a five-part series that examines best practices for hiring an investment sales broker.

When it comes time to sell a property, choosing the right investment sales broker to manage the process is key. Choosing the right broker to represent the seller exclusively often results in a higher price, more beneficial terms, a more qualified buyer, and a quicker closing, as they can quarterback the transaction towards the most successful outcome. Here are a few areas where the right seller’s agent can add value:

  1. Learning how to maximize value before going to market

A broker with experience in your asset class and/or geographic area can offer insights into how best to position the asset for the greatest proceeds at closing. The improvements that are most desirable to investors for an urban hi-rise multifamily asset may differ significantly from those that will appeal most to suburban garden-style multifamily investors. Your broker should have a track record of sold properties with comparable features to help establish the asking price for your property. They will also be able show how properties that have upgrades/features similar to those you are consider adding to maximize value have performed in the market.

  1. Gaining access to the broadest possible pool of prospective buyers

When you engage the right investment sales broker to help market your property, you not only benefit from a successful track record, but also gain access to their proprietary platform and network of active investors. By proactively marketing to the right buyer pool, your exclusive agent will be able to create competition among qualified buyers to maximize the selling price of your investment real estate property.

  1. Gain the understanding of a buyer’s perspective

It is just as important for your broker to understand your property and the market as it is for them to understand the buyer’s mindset. Among the pool of prospective buyers for your property will be individuals with varying attitudes about risk, different sources of financing, different investment goals and differing levels of experience. It is your broker’s job to help evaluate the pool and identify the individuals with whom they can work to structure the best deal for their seller.

  1. Negotiate a transaction that is your favor

An experienced investment sales broker is well-versed in structuring deals that are aligned with their clients’ investment and sales goals. By having an agent exclusively represent you as the seller in the transaction, you gain the support of an advocate who can help move the transaction in the favor of the seller. Your agent will understand your end goals, timeline for completing the transaction and how best to negotiate on your behalf. There is also a probable chance that your agent will have worked with the same buyer on other transactions and be able to leverage their experiences with other transactions to help negotiate your deal. Remember, your broker will also be responsible for managing buyer expectations during the due diligence and financing process so it is important that he or she can be strong advocate for you throughout this portion of the contract as well.

Finding the right investment sales broker to help sell your property can be a time-intensive process. By focusing your efforts on finding a broker with rich local market expertise, experience representing sellers in that market, the ability to respond to objections and solve problems, and a proven track record of demonstrating value, investors can help to maximize the potential for selling their investment property at top market value.

Looking to add value to your commercial real estate investment before you sell? Download our complimentary guide to value-added real estate investing today.