Building Trust In The Marketplace Through Off-Market Deals
In the hypercompetitive CRE market of California’s major cities, building client trust in the marketplace can go a long way towards maintaining profitable, healthy buyer/seller relationships. This goes beyond simple transparency to cultivating a peace of mind that comes with the knowledge that the right buyers and sellers will find each other.
Knowing more about the market than one’s competitors and how to offer clients more value is the secret to establishing that trust, and effectively becoming a client's most trusted adviser.
Southern California, for instance, has an abundance of capital chasing deals. San Diego sellers are hesitant to list properties with any one broker for fear of getting caught in a battle between several brokers in the same corner of the market. This results in a lot of frustrated buyers in a perennially overflowing seller’s market where the same sellers are scrambling to find clients who will pay the most money against the best market price.
This is where off-market deals come in. In off-market deals, buyers speak directly with the owner with very little competition. Sellers often enter off-market deals to test the market waters, as well as receive feedback from trusted attorneys and brokers without publicly listing the property and committing to the listing.
"Buyers in highly competitive markets are searching for openings in which they aren’t up against dozens of other prospects," says Voit Real Estate Services SVP Kipp Gstettenbauer, "and brokerage firms are seizing the opportunity to offer clients options they wouldn’t necessarily know existed through regularly marketed listings."
How does this work? The company offers a small number (usually two to four) of buyers to the sellers, as well as their proof of funds and track history, scaling the overwhelming number of clamoring buyers to a workable number for landowners and sellers, and giving potential clients the opportunity to “campaign” for a property on an individual basis with a more reasonable chance of closing a deal.
Brokerages can also find lucrative buyers this way. Retail buyers, REITs and institutional clients are more likely to pursue off-market opportunities due to their closing ability and the likelihood of receiving more personalized, one-on-one attention.
Such a system establishes a relationship built on mutual trust; the broker harbors knowledge unavailable to competitors, bringing more value to clients—significantly reducing stress and wasted time for both parties. Buyers don’t want to be taken advantage of, and sellers can easily work with one or two clean, big offers suitable for both the area and the pricing.
Another benefit of off-market deals? Firms can synthesize sophisticated market research from firsthand data gleaned from brokers. Agents can then transfer this knowledge to their clients, empowering them to make informed decisions on both ends of the transaction.
It’s all about placing the power back in the buyer's hands, rather than scaring them away from it.
“You’re completing a fiduciary responsibility because you have information the average buyer isn’t aware of,” Kipp says. “If you’re representing large landowners, having a supply of completed off-market sales and leases in this corner of the market is key, as well as knowing who can pay more. You drive value by giving lease owners 10 to 12 people to choose from rather than 20 to 30.”
To learn more about Bisnow partner Voit Real Estate Services, click here.