by Cliff Ford
When buying or selling a multi-unit residential property, your real estate representative can be your greatest asset.
In the “Do-it-Yourself” world we live in these days, many apartment building owners and investors can find themselves caught off guard by unforseen issues that can arise from the personal sale or purchase of a multi-unit residential investment.
The internet is filled with advice and even tools for handling property transactions without the help of a qualified real estate broker or sales representative. Current owners looking to sell their property can find websites dedicated to “FSBO’s” (For Sale By Owner) and purchasers can find templated purchase agreement contracts that they can download for free and fill in themselves.
While the idea of saving a little money is attractive - avoiding paying the commission fees associated with traditional agent representation - the long term effects on your transaction could wind up costing significantly more than the initial savings on the commission.
When You’re Looking to Sell...
In our experience, when an owner of an apartment building is considering selling, one of the first questions is “How can I save paying the commission?” The problem lies in the understanding of what the role of a good real estate representative can mean for your transaction.
Before your listing even hits the market, your representative should be able to give you an accurate value of the property and know who to target with the listing in order to generate offers for you.
Once your building is on the market, your representative should be screening responses and finding the buyers who are truly interested and qualified for the financing needed to obtain your property.
Once a buyer has been found, your representative can become a third-party negotiator to settle on the price and conditions you are comfortable in accepting.
During the due diligence process, your representative can also identify issues with your buildings’ condition or financials that could be improved for the smooth closing of the property.
When You’re Looking to Buy...
If you are looking to purchase an apartment building, it is even more crucial to have representation.
Many buyers have been burned when purchasing an investment property, after the unknown variables creep up on them. Purchasing a building without a qualified “agent”, means you may not notice major repairs the building needs or gaps in the expenses that could throw off your income projections. In the long run, this could cost you tens of thousands of dollars.
When it comes to buying or selling an apartment building, you have to account for the risks involved - and in my opinion - doing it yourself is a hefty risk to overcome. Find yourself the right representation and you will achieve greater results for your multi-unit residential business!