Similar to an expert agent assisting buyers and sellers transact a property, a great broker provides clarity, comfort and a thorough understanding of the agency and rent roll sales process.
Transacting an agency or rent roll is significantly more complex – and normally more risky – than a standard property sale. It’s surprising to see the number of principals transacting a rent roll or agency without expert help. Understanding the responsibilities, expectations, contracts and duration within the transaction requires a specialist broker to act for you.
A good broker will demystify the process AND guide their clients so they can achieve the very best result, and ultimately remove a lot of the stress and risk surrounding the sale process.
Below are some of the key reasons to consider using a specialist broker if you’re selling or looking to grow your current operation.
RISK OF UNDER/OVERSELLING
Our research shows principals rarely know the true market value of their businesses. We’ve come across several businesses and rent rolls which have either undersold or, more typically, are holding out for an unrealistic price.
As part of their engagement, a broker must conduct an independent valuation. It’s a small investment to give you a clear understanding so you can make an informed decision. There are multiple factors which affect the value, so don’t rely on an unsubstantiated appraisal.
BENEFIT OF KEEPING IT AT ARMS’ LENGTH
Would you advise one of your sellers to sell their home themselves? As with real estate transactions, buyers and sellers of rent rolls and businesses are ultimately acting in their own best interests. Sellers are typically emotionally attached to the asset. Incorrect or irrational decisions can be made with significant consequences, so having an experienced broker involved keeps the transaction running smoothly.
DE- RISKING THE PROCESS – HAVING SOMEONE IN YOUR CORNER
What’s normal within a rent roll transaction? How long should the retention period be and how much help should the buyer give the seller with hard-to-convert landlords? Who’s responsible for drafting the contract and what happens if some of the files aren’t compliant at settlement?
Our knowledge of independent transactions tells us it’s just not worth the risk trying this on your own. There are simply too many pitfalls and hurdles you won’t cross effectively. A broker who’s conducted a large number of agency/rent roll transactions, in conjunction with a lawyer who’s experienced in agency and rent roll transactions, are the best people to help you through the maze.
UNDERSTANDING INDUSTRY STANDARDS AND WHAT’S CURRENT
Just like standards for practising real estate, there are similar standards when it comes to buying or selling a business. These are changing rapidly and becoming more complex in a changing market. Anecdotally, most principals, and certainly new entrants to the industry, are not up to speed when it comes to issues such as what will influence the value, what constitutes the sale, what information banks require, what contracts/documents should be used, what constitutes due diligence, what are the rights/remedies of default, franchise agreement challenges or how do I transfer managements. This list goes on and on.
By engaging an experienced, specialist broker, they will work with you to understand your position, explain what’s normal during these transactions and ultimately demystify and de-stress the process to ensure you reach your objective.