Sellers decide to keep the sale of their property private for a variety of reasons. Generally they’re seeking to minimize competition and maximize confidentiality, but sometimes it happens that they’re just not in any rush to sell but will entertain offers.
In some cases, off-market offerings are in pre-foreclosure, so they’re not yet being advertised publicly. This can give buyers a real advantage, and many actively seek out off-market deals. For these investors a private deal means less competition and a faster closing.
Where are the qualified buyers?
Knowing that there are investors out there looking for off-market deals is not the same as connecting with them. A broker’s role in this process is to discuss the property with select buyers whose interests and qualifications make them a good match. These are generally people that the broker knows personally, so the pool of potential investors, though well qualified, will likely be small.
Part of evaluating a buyer’s qualifications should involve creating a profile for that individual that includes proof of identity and proof of funds. This process, and possibly the signing of a confidentiality agreement, should be complete before financing information, appraisals, market studies, operating statements, rent rolls and all other due diligence documents are turned over to the potential buyer.
Some of this qualifying of investors is expedited when the seller is dealing with institutional buyers and REITs. These investors often prefer off-market deals, primarily because of the limited competition involved. They expect to invest considerable time into evaluating the property, and are not interested in competing with unqualified parties who can drive up prices with unrealistic offers.
So qualified buyers are out there, certainly. Connecting with them can be challenging, but here are a few tips to consider.
Identify what type of buyer you’re looking for.
You might be surprised by who you know and who you have access to. As a CRE professional, you will have a good idea of where the off-market deal you are holding might eventually land. Take a look at access points into those firms and see if you can find a way to talk with an acquisitions professional or asset manager. No one likes to be shown deals that are obviously not a match. Know your targets and do your homework.
Look to work with a broker or Co-broker
Make use of the Internet’s power to reach thousands of people around the world to connect with qualified buyers. This approach has been used for several years for publicly available properties, on sites like Zillow and Trulia, and now it’s being applied to off-market deals as well.
The use of platforms designed to match deals with investors who are likely to have a serious interest in them saves time and also vastly expands the pool of buyers for each property.
Brevitas is a ground breaker in this area, providing a platform that allows investors to find deals that match their criteria and communicate easily with the seller. The site handles document transfers and digital confidentiality agreements, simplifying the entire process. Best of all, members are pre-qualified, specifically interested in off-market deals, and they come to you, the seller.