When you sell a property, the selling price is like the roof on your house- the total return is not complete until it is ‘topped’ by the sale price which gives you the total Rate of Return over the life of your investment.
So if maximizing the sale price is the goal when it does come time to sell, then why would the investor not do everything they can to hit the top number?
There are several options an investor could take when time to sell.
1. Sell themselves.
With the heat wave of demand that has existed over the last two years, why not just sell privately to one of the many investors that approach them?
The reason is quite simply- competition- the more exposure to the market and the more competition there is, the higher the price.
Limiting the buyers who have the option to see your property and make offers will reduce your offers, plain and simple. Providing it to the open market will yield you competition and thus a higher price.
2. Sell with a Broker who will keep the information private.
Many investment brokers operate behind closing marketing doors that keep the information for sale properties limited to a select number of buyers.
The rationale for this is to make sure the buyers are qualified. That is very important but limiting the exposure to the market will have the same affect on the sale price- limited competition will bring a limited number of offers.
This strategy has become so common that many buyers expect that if they see a property publicly advertised for sale that it is ‘no good’ because that means many other investors have passed on it before it goes to the public market.
3. List on the open market with a Broker that openly cooperates and shares the property for sale publicly.
Capstone is built on this premise of openly sharing listing for sale and the cooperation between a listing broker and a selling broker.
Exposing the property for sale to a broad base of the market as possible will always benefit the seller by creating competition, which yields a higher price.
When it comes time for you to put the roof on your house, and to sell the asset you have worked for, keep the sharing of information in mind, and make sure you don’t miss out on 18.4% of the total value of your property.
