As a real estate investor, you are likely bombarded with mail and calls from other investors who want to purchase your property from you….. for cheap of course.
And double the number of contacts if you own a Mobile Home Park!
With so many buyers out there- why the heck would you hire a broker to sell your property, if you do decide the time is right to sell?
I have seen a lot over the years….so here is a few reasons to consider why it may be better to hire a broker.
1. Expert Problem Resolution
Expect problems. They will likely happen. Of the number of transactions we work on- usually 75% will have some form of difficulty, 10% severe problems, and about 15% that are blissfully unaware that we live in a problem world.
I always say that we earn the fee as brokers when the problems come, because the knowledge and solutions we bring are a huge part of why people choose to work with brokers.
Some of the issues we have seen:
- Environmental concern:
Environmental issues can range from minor concerns like lead paint or asbestos to major problems such as soil or ground water contamination.
A seasoned broker understands the disclosure requirements (and yes, even with commercial property you have to disclose environmental issues), remediation processes, and negotiation strategies necessary to address these concerns without losing the deal. We have learned which environmental issues are deal-breakers versus those that can be resolved through proper documentation and price adjustments.
Buyer concerns over zoning, market demand drivers, property condition, insurance and tenant lease terms are all common items cited that give buyers cold feet. We bring in the socks with market information and relevant experience to help address the concerns and keep the transaction moving forward.
- Appraisal discrepancies:
Appraisal challenges frequently arise in investment property sales, particularly when comparable sales are limited or when unique property features don’t translate well to automated valuation models.
Professional brokers maintain relationships with qualified appraisers and understand how to present property information in ways that support accurate valuations. If appraisals come in low, experienced brokers know how to challenge the findings effectively or find alternate solutions.
- Financing hurdles:
Financing complications can be particularly complex with investment properties, as lenders often have stricter requirements and different underwriting requirements. Brokers understand these nuances and can guide buyers toward appropriate financing options while helping sellers structure deals that satisfy lender requirements.
2. Competition Drives Higher Sale Prices
One of the most significant advantages of working with a professional broker is their ability to generate competitive bidding situations that drive up your property’s sale price.
- This competitive advantage stems from an investment brokers’ extensive buyer databases and marketing reach. Investment brokers maintain relationships with investors who are actively seeking properties. This is different from a typical agent who just lists the property online and waits for buyers to contact them.
- The power of competition cannot be overstated in real estate transactions. When multiple buyers compete for the same property, they’re often willing to pay above asking price, waive contingencies, or offer more favorable terms to secure the deal.
- This competitive dynamic can result in sale prices that exceed what you might achieve through individual marketing efforts by thousands or even tens of thousands of dollars.
- Additionally, investment brokers understand how to structure marketing campaigns that maximize exposure and create bidding wars. They know the optimal timing for listing properties, how to price them to generate multiple offers, and which marketing channels reach the most qualified buyers.
This strategic approach to marketing and pricing often results in faster sales at higher prices.
3. Time is Your Most Valuable Asset
Time efficiency represents one of the most overlooked benefits of professional representation. Selling investment properties requires significant time investment in marketing, showing properties, negotiating offers, and managing transaction details.
- For active investors managing multiple properties or those with demanding careers, this time commitment can be prohibitive.
- The property showing process alone can consume enormous amounts of time. Investment properties may require multiple showings to different types of buyers, including investors who may want to inspect properties thoroughly and contractors who evaluate renovation potential. Coordinating these showings, being present for security reasons, and following up with prospects can easily consume 20-30 hours per property.
Professional brokers handle all aspects of the showing process, from initial inquiries to final walkthroughs. They screen potential buyers to ensure they’re qualified and serious, before showing the property, to minimize disruption to the tenant. This service alone can save sellers dozens of hours while ensuring properties are shown professionally to qualified prospects.
4. Specialized Knowledge Translates to Higher Returns
Perhaps the most compelling reason to hire a broker is their specialized knowledge of pricing strategies and market conditions that can significantly impact your bottom line.
- The question isn’t whether you can sell your property independently, but whether you can maximize its value without professional expertise.
I have seen many owners who ‘Understood the value of their property’, but find out later that they left significant money on the table. When selling a significant asset, is it worth it to take the chance that you forgo additional profit because you did not want to pay a broker?
Even as a broker, sometimes I get stuck in the automatic thinking of ‘If you have X, then your value is Y’, instead of looking at the whole picture. However, our goal when reviewing each property is to examine all the angles, and make sure any potential revenue or cost reduction is identified, and make sure that owner gets the most money for their investment as possible.
- Professional brokers analyze rental income potential, operating expenses, and cap rates to determine optimal pricing strategies that appeal to investor buyers while maximizing returns for sellers. They understand how different buyer types value properties and can adjust marketing and pricing strategies accordingly.
- At the same time, it is important not to overprice the property, as many qualified buyers will then pass it by.
- Experienced brokers understand neighborhood trends, development plans, zoning changes, and economic factors that influence property values.
They know which improvements add value and which don’t, helping sellers make informed decisions about pre-sale preparations. This knowledge can mean the difference between leaving money on the table and achieving premium prices.
Professional brokers also understand negotiation psychology and have experience handling complex investment property negotiations.
- Often times the 3rd party between the seller and buyer, helping to address concerns and keep the parties talking can make the difference between a dead deal and a closed one.
They know how to structure deals that satisfy both parties while protecting their clients’ interests.
Making the Right Choice for Your Investment
The decision to hire a broker ultimately comes down to maximizing your investment returns while minimizing risk and time commitment.
While commission costs are a legitimate consideration, they should be weighed against the potential for higher sale prices, faster transactions, and professional problem resolution that brokers provide.
For most investment property sales, the combination of competitive pricing, expert problem-solving, time savings, and specialized market knowledge that brokers offer far outweighs their commission costs.
The key is selecting a broker with specific experience in investment property sales who understands your market and can demonstrate a track record of successful transactions. Consider interviewing multiple brokers, asking for references from other investors, and reviewing their recent sales data before making your decision. The right broker partnership can be one of your most valuable business relationships, contributing to higher returns and smoother transactions across your entire investment portfolio.
Most of the investors we work with appreciate making more money in less time, and that is why they call us. If you are considering selling an investment in the coming year, contact us to discuss the best strategies to prepare for a successful sale.
