Monthly Archives: November 2013

How Selling A Property Off-Market Hurts Sellers

More often than not, every commercial real estate broker must overcome their clients’ objection to sign a listing agreement. It seems to be the tipping point where a hot lead turns into a probable deal in the eyes of brokers. Some people have various sales tactics. They all do it differently. Some people have the natural magnetism that gets people to sign documents without any objections. Others have to beg and plead with their clients to PLEASE just sign the listing agreement.

Some of the top producing brokers out there will tell you that if their client is hesitant to sign an exclusive listing agreement, they aren’t true sellers and their time is being wasted. Others will agree to keep their eyes and ears open for a buyer who might be willing to enter into a contract with a seller who isn’t committed to selling. Whichever way we look at it, the truth is that selling a property without properly marketing it and exposing it to as many qualified buyers as possible goes completely against the American models of fair trade and capitalism.

In October’s issue of REALTOR Magazine, Robert J. Bailey of MLSListings Inc. wrote an article titled Off-MLS is Off-Base, which talks more about the Fair Trade Model and how the real estate industry has evolved to having this expansive MLS thanks to technology. He also shows how “properties marketed off the MLS have nearly doubled over the past year in some parts of California.” That means that either 1) more and more brokers are treating their sellers unethically by not exposing the property to the market so that they can double-end the deal and earn double the commission or 2) sellers are not committing to selling their property until they see reasonable offers from brokers (which at that point, signing a listing agreement and going to market is almost pointless). It’s a sad trend, because not using the incredibly powerful listing and marketing tools available to real estate professionals today is like going back 100 years to sell your property, where your real estate agent would tell a few people in his circle about your offering and try to drum up interest by word of mouth.

To property owners, it seems much easier to tell 100 different brokers they want to see offers rather than sign a listing agreement with one broker. Why? Because if 50/100 of those brokers remember his property, some of them will pitch it to a prospective buyer just to have something to pitch. If – let’s pretend – 20 of those brokers actually pitched the deal, a few of them might actually be able to write an offer, right? Then the only the seller needs to worry about is accepting an offer with a high enough price. The truth is a large majority of the time, brokers don’t waste their time with uncommitted sellers. We’re trained to practice Probability vs. Possibility brokerage, to put effort only in deals which are certainly probable to move forward.

Although, with the amount of people looking to buy off-market property these days, the two worlds may have been reversed already. Every single day I talk to at least a dozen new people who only look for off-market properties. A lot of times, they’ve not only seen everything on the market, but they’ve already scoured through dozens of off-market deals and tried every owner they possibly could.┬áIn a perfect world, supply and demand would somehow settle down and balance out. I guess this “chaos” is just a way of keeping things interesting.

To find out more about how listing your commercial real estate for sale instead of relying on off-market magic will benefit you, feel free to call me now at (866) 251-3851 or drop me a line at george@verdugoproperties.com