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. In 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 email@example.com
We’re pleased to announce that we have a couple more renovated homes near completion in the Pasadena and Glendale areas. They’ll be hitting the market within the next week. For anyone interested in previewing them or just general information, contact Vic at (818) 590-8949 for an appointment. More information will be published when the listings are live.
In an age of intrusive technology and the ability to do business with people without ever seeing them, the real estate industry benefits greatly from keeping it mostly “face to face”. Of course, there are plenty of deals being done from across the country (especially after the REO business became so huge), but for the most part, that sense of wanting to do business with people you know and trust will never go away.
As an agent, I’ve always been adamant about meeting a prospective client in person before even talking about their investment. It gives us an opportunity to gauge each others motivations and style of doing things. For instance, every agent will tell you about at least one client who rubbed them the wrong way when they met in person and as it turned out, their gut instinct was totally correct and that client ended up being a waste of time or a headache. Some people handle these things differently depending on their circumstances, but more often than not, we tend to go with that intuitive decision we make about people when we meet them.
Clients on the other hand, are given the opportunity to have a little “job interview” type session. I would never list my property and trust my real estate investment in the hands of somebody I couldn’t get along with personally. Nor would anybody who’s smart enough to have property to sell. If you can’t sit in front of me and answer my questions in a straight-forward manner, why would I want to do business with you?
Now, with technology catching up to the industry, there’s a lack of balance. People either start their search for their real estate needs online and end up meeting someone off the internet that’s a bit weird, or they use their personal network and find someone via word-of-mouth. Either way, they’re looking for that trust. On the other side of the scale, I think it’s safe to say that most agents aren’t trained correctly. Natural talent aside, knowing how to immediately build rapport and follow the natural flow of decision-making isn’t common in real estate professionals. What ends up happening is a trial and error type of game that costs people time and money and ultimately slows down the volume of real estate transactions.
How can we find the perfect medium between “face to face” and “hi-tech”?
We’ll be listing this home for sale within the next few days. It was just given a MAJOR facelift and remodeled/renovated throughout.
- 5 bedrooms / 3 bathrooms
- 2244 square foot living area / 7565 square foot lot
- Two master suites on main level
- Guest house as a bonus (square footage not included)
- Brand new sprinkler system
- Brand new Marathon 2 sod
- Completely remodeled interior
More photos will be added as soon as possible!
Call Vic Avakian with any questions at (818) 590-8949.
Ask any agent and they’ll tell you at least a few stories about sellers who insisted on pricing their property at an unreasonably high price and actually believed the property would sell. Of course, given the right location and attributes, it’s likely some of them even got their price, but a large majority of these cases end up in full-term listing periods and many failed negotiations.
As if a deal that fell through isn’t enough, now the seller and listing agent both have to deal with their property’s reputation being a bit tarnished. When I see an overpriced property on the market for months – for example – I’m almost unconsciously skipping over it as a possible fit for a client simply because the price throws me off.
Furthermore, it literally reduces the chances of your property getting the exposure it deserves! If I’m an active buyer looking for 10 unit properties in Glendale, and I know that most buildings that size trade in a certain range of price, I’m probably going to search the MLS or LoopNet within my criteria. So, what essentially happens is that overpriced 10 unit building doesn’t show up in my search results, so I never see it.
Trulia’s Michael Corbett published a blog post in January 2012 titled, “Pricing Matters: Using List vs. Sale Price To Stay A Step Ahead“. Michael explains that pricing your property too high (or low) can eventually turn your real estate into a “dead listing” (LOVE that term!).
While most agents (at least locally) would do anything to keep a listing even if it’s overpriced, it’s important to know the right and wrong ways to expose your name and/or property.
Sure, a few people do get lucky, but pricing according to realistic market prices is your clients’ best tool to a fast and profitable sale. The former approach will cause you to miss any opportunity of attracting multiple offers. It will also prolong the time it takes to sell and, eat up value time on the real estate market.
Need to sell your building? Read on.
The common theme in the real estate market today seems to be buyers who are actively looking for more “off market inventory”. Almost every active agent you speak with will tell you that they do in fact talk to numerous people who claim to be buyers but just don’t like what’s on the market. They’d rather see properties that aren’t on the market because they believe they can either get a better deal or find a value-add opportunity where they’d build some additional equity.
What this means to people selling their real estate (and their brokers):
If your property listed on a site like LoopNet.com, RedFin, your local MLS or pretty much any mainstream online real estate listing site, you’re essentially relying on those platforms to attract potential buyers to your property that’s for sale. Your building is presented on a uniform template (the same exact way every other property on that site is presented). People can see all the details about it in a way they’re used to, because they scour these sites so frequently that their brains are programmed to look for certain things. One of those things is your PRICE.
When a property’s price seems fairly low, what happens? Everybody wants to know why. So, you’ll get a bunch of calls and hopefully some offers. You’ll spend quite some time juggling between offers and eventually end up in contract at a much higher price than you listed the property for because of the bidding atmosphere created around your deal. This is the exact opposite of what happens when a property is listed at a price more than the property is worth. You’ll get a few low-ball offers from buyers who aren’t too serious and end up in contract at a much lower price point. Let’s not even mention the complications that come up during escrow like the real estate not appraising for what you think it’s worth and the buyer’s lender pulling out. IT HAPPENS ALL THE TIME.
In the most common scenario, an overpriced listing will sit on the market for months mainly because most people see the price and immediately move on. They gain the impression that the seller is simply stuck to his/her price, which is an immediate turn-off for buyers. That’s where the whole “put my property on a site online and wait until someone pays my price” mentality is extremely flawed. You can accomplish “your price” through sharp negotiation skills and marketing techniques, but it’s never going to happen when your property is branded into people’s heads as “that overpriced one”.
That’s where the off-market real estate community becomes a beneficial tool for sellers. If you’re able to engage a savvy broker who has a vast network of connections and is seen as the source for deals, you’ll be able to sell your property effortlessly.
More on this topic at a later time. For now, I’ve got calls to catch up on! Check out my other “offmarket” related posts in the meantime. Thanks!
Your business can enjoy major street exposure on a high-traffic boulevard with this recently remodeled property in the heart of Tujunga. Its practical layout make it relatively simple to convert for any use without much (or any) work necessary, depending on your line of business. The total usable square footage (approximately 21,000sf) is split between two structures; the showroom in the front features an exposed truss ceiling, service counter and plenty of space for merchandise display while the garage in the rear of the property provides an optimal storage/work area which can be used as auto bays or easily converted to a versatile work space. There is also ample parking on the property, which is secured with black iron gates.
The immediate surrounding area is densely populated and is home to numerous thriving small businesses and retail stores alike. This busy corridor of Foothill Blvd is also actively improving, with many new constructions and rehab projects underway within a short distance of the property.
On Foothill Blvd. West of Tujunga Canyon and East of Commerce. Close to the 210 / 118/ 2 Freeways. (200 linear feet of frontage on Foothill Blvd. surrounded with many new commercial (retail, office) developments in Tujunga, CA. The property is a combined package of 6 different lots of approx. 35,000 sq. ft. with approx. 21,000 sq. ft. combined two separate buildings. This property is located on a major thoroughfare with very high traffic count, adjacent to Tujunga YMCA and surrounded by schools, churches, retail stores, restaurants and local small businesses. Ideal for users of various types.)
Brokers & Principals,
We currently have numerous immediate buyers for NNN deals. While our usual sourcing methods are turning up a few deliverable properties here and there, we’re resorting to asking the general online CRE investment community as well. Do you have a NNN property to sell? (fast-food restaurants, single-tenant net leased properties, or pretty much anything with a long-term credit tenant)
Please send deals and inquiries to firstname.lastname@example.org . We ask that you please make sure that the property is deliverable and have details ready, as we will be moving rather quickly.
Also, for any owners of net-leased real estate investments…please feel free to contact us for a free property evaluation if the thought of selling interests you.
Here’s just a quick update about the Los Angeles foreclosure climate, for any investors who have been looking to start buying properties from Trustee Sale or are currently wondering why business is winding down.
(Note: Verdugo Properties is fully equipped and prepared to assist in the purchase of properties from foreclosure auctions, so long as the investment requirements are met. As seasoned experts, we’re constantly researching and tracking foreclosures in Glendale/Burbank/San Fernando Valley in order to provide our clients with the highest level of market knowledge and advisory services. Contact me for details.)
Currently, it seems as though the available selection of properties that actually make it to sale is shrinking day by day. It has become commonplace to track a property for months as it is postponed or cancelled over and over again. This ends up frustrating many investors and auction agents who make a living buying and selling properties from Trustee Sale. So what’s the big idea?
As major banks continue to beef up their loan modification efforts in order to keep homeowners in their homes, many homeowners in default are breathing a sigh of relief knowing that they have some time to bring their loans current. Not too long ago, it was common to strongly consider bankruptcy, short sales or even just walking away from the property altogether. Loan mod and bankruptcy specialists (usually attorneys) charged an arm and a leg and real estate agents stalked homeowners in default like vultures. Now, the very first option banks suggest to distressed borrowers is to be considered for the various different loan modification programs.
If the borrower agrees, the banks’ loss mitigation departments will request that the foreclosures be cancelled (or more commonly, postponed) in order for the borrower’s file to be underwritten and approved. Then, the borrower has a three month trial period. Should the borrower fail to pay during the trial period, they’re considered for several OTHER workout options. All the while, the same property is being announced and postponed continuously at the steps of the courthouse.
Just off the top of my head, I estimate we research and focus on anywhere from 25-28 properties a day (in the Glendale/Burbank/SFV areas) that are announced for Trustee Sale. By the end of the day, we’re lucky if we see ONE OR TWO of those actually come available for bid. This obviously is a clear sign that supply is drying up. As supply decreases and demand increases, naturally, the price of these once “steal of a deal” properties are coming closer and closer to being on par with the mainstream real estate market in regards to rising prices.
The rise of final selling prices at the auctions means rising prices in the general real estate market, because a lot of these homes end up being flipped for profit by investors. That’s great news in regards to the recovery of the market, however it’s extremely bad news for the people who are heavily involved in the business of flipping foreclosure homes…at least for the long run.
As home prices continue to rise, properties that were once under water will begin to see some positive equity, thus giving them the opportunity to refinance out of unfavorable loans and take advantage of the current interest rates. Also, homeowners who would have been forced to consider a short sale because of their financial circumstances can now take advantage and possibly sell for a profit, giving them money to invest on an albeit smaller but more affordable home.
All of this translates to fewer and fewer lucrative opportunities at the foreclosure auctions in the coming year. Unless there’s another massive wave of defaults, I don’t expect to see this window of opportunity to flip foreclosures for profits as high as 20% last very long. I strongly encourage those of you who have been sitting on the sidelines to reach out to an expert and see if it’s a good time for you to enter the foreclosure market, while it’s still lucrative. If not, there are always attractive multifamily deals once buying a home becomes “cool” again.
- George Avakian
*Note: Anybody who uses a blog post from the internet as the basis of their investment strategy is asking for trouble. PLEASE, consult with an expert, if you aren’t one. If you simply don’t like talking to pushy brokers, e-mail us and we’ll point you towards someone who can give objective advice.*
This is the article every real estate investor we know has been waiting for.
The secret to how we (and probably thousands of other people) have been making a consistent return on investment flipping properties. As fair warning, let me say that I can’t give away all of our operational details over a blog post. (Not without meeting you at least!) Those of you who already know this method and have disregarded it will most likely see this from a skeptic’s point of view, simply because it seems so basic. I’ll point out though, that if executed correctly, our system can, and probably will, be the safest, steadiest and most efficient way to invest in real estate. This particular investment strategy especially holds true typically for areas such as Glendale or Burbank, CA that have a robust local commercial and housing market, with strong middle-to-upper-class demographics.
Before getting into the basic steps of how this plan falls together, first you need to know who we are. We’re a father and son brokerage team. That means, between the two of us, we have an arsenal of experience in almost every aspect of the real estate world. We put it to good use when it comes to making money grow. Also, we’re surrounded by great people. We’ve built a solid team of industry-related professionals; real estate and eviction attorneys, accountants, lenders, title experts, escrow companies, contractors, managers, leasing specialists, bankers, private investigators, and so on. It’s imperative to have these people want to work with you. So, consider this step one in your own process.
So essentially, all we do is purchase properties from Trustee Sale (also known as a foreclosure auction), fix what needs to be fixed on the property, solve any problems with it, put it back on the market and make a profit. Sounds like the oldest concept ever, right? It is. However, the way in which we go about choosing which properties is ultimately the key here.
My father, Vic Avakian and I have spent a great deal of our time in this business valuating properties and analyzing acquisitions for clients. He’s always said, time and time again, that he examines each property he considers for his client as if he was purchasing it with his own money, for himself. So every night, we research the properties that are going to hit the auction block the next morning. We narrow down the list to areas that we know inside-out and have deep business roots in. For example, most of our recent transactions have been in a particular area of Glendale or Burbank, simply because it’s close and we know the community. We’ll gather every piece of due diligence information we possibly can about the properties on our list in these areas. Then, we’ll put our valuation expertise to use to figure out what these properties are worth on today’s market at fair market value (or even a quick-sale price).
Once we have a value on each property, we’ll take a look at the minimum bid amount assigned for that property by the trustee. Next, we use our formula (which I will not release on the internet – feel free to e-mail me about it) to underwrite each deal and assign a Maximum Bid Amount or “ceiling”. This analysis includes a wide array of highly conservative figures for expenses such as Title Commitment Binders, renovations, escrow fees, lenders fees, etc Now, when we go to the auction and start bidding on a property, we’re thoroughly prepared and know exactly when to stop bidding, because anything past our ceiling means we won’t be making as much profit.
So, some of the mortgage buffs reading this are going to ask “Where are you getting funding? Are you buying this all cash?”
We’re buying this with none of our own money. In fact, as I’ve mentioned before, we work with and for our investors. So, you could say our investor provides the capital and we leave our commission in the deal. Also – and here’s the main component many of you will have trouble with – we work with a specific lender and only this lender for one reason: our lender will finance all of our purchases at trustee sale, as long as we’ve gotten their approval on the list of properties we give them every evening. So, our client will only have to put 25% down and our lender physically shows up to meet us or our representative at the auction with enough money to finance whatever deal we may have our eye on.
Ladies and gentlemen, pay attention. The last sentence of the last paragraph is the sole reason this post is now on the internet. Of the hundreds of highly active and involved real estate and mortgage professionals I’ve met and shared experiences with, nobody has ever done this in this exact way. Why it took us so long to catch on to this is a different mystery as well.
Now, let me clarify that this process isn’t easy. It’s tedious as hell and takes a lot of patience and intuition. You technically can’t inspect the home until after you’ve purchased it. You’ve got to be sure that you’re making a well-educated decision. Also, you’ve got to trust your instincts. That’s why we stick to areas we know well and price ranges we know we can manage selling. We’re not after multi-million dollar shopping malls (although who knows, if enough people are willing to invest we could syndicate one!).
This is all I’m going to write for now. Feel free to add your own comments or get in touch with me for a chat. I’ll be posting a registration link to receive a brief overview of the transaction in greater detail. Check back soon!
George Avakian(818) 400-7557 email@example.com