How to Control the Sale Process
Create Step By Step Plan and Manage Every Stage of the Sale from Marketing Until Closing
When you sell your apartment building, you want to get the best deal possible. The best way to ensure you maximize value is to engineer a process to encourage qualified buyers to compete for your property.
An organized process not only reduces your stress, it also gives buyers a clear path to a decision. Motivated buyers will rise to the occasion, while tire kickers will be kept at bay.
Unfortunately, many sellers don’t give the sale process much thought.
Instead, I often see sellers with
Ugly, incomplete, and unorganized marketing material
Incomplete information for buyers to evaluate
No plan for how and when tours will be scheduled
No deadline for buyers to submit offers
No process for evaluating and comparing offers
Sellers without a plan get the subpar results, and a headache to boot.
So instead of going to market in a chaotic fashion, create a plan.
Follow these 5 steps to ensure you have control over the sale.
Step 1: Create Marketing Material
Your marketing material is the first thing buyers see. Their first impression leads them to make assumptions about the quality of your property.
Even mediocre properties can be made to look excellent with well-designed marketing material. But great properties look cheap if presented in an unprofessional way.
Buyers will formulate opinions about your asset either way you present it. It is in your interest to present your asset professionally.
When I say “Marketing Materials”, I’m referring to:
Property brochures
Offering memorandums
Direct mail postcards
Email blasts
Landing pages
Virtual deal rooms
These marketing assets introduce your property to the market. They will create the buyer’s first impression.
It’s worth it to invest in your marketing material. These documents create interest in learning more about the opporunity.
Step 2: Distribute the Same Info to All Parties
Too many sellers simply provide a rent roll and P&L (if that) and then wait for questions from buyers.
You need to control the transfer of information.
When a potential buyer has a question, have the answer ready. Not knowing answers, or having to search for further documentation, makes you look scattered. Buyers might conclude your property is run in a scattered way as well.
The best way to handle this problem is to have all of your documentation ready.
Then make all the required documents available to interested parties through a virtual deal room. You can protect your information by making them sign a confidentiality agreement before getting access to the files.
This way, when buyers have questions, you can point them to the deal room.
All buyers will be on a level playing field. The best way for them to stand out is to make a great offer.
P.S. I offer a checklist of documents to collect for your deal room. Click the link below
Step 3: Conduct Tours Systematically
Tours are a fantastic way to get buyers interested in your asset… When they’re done correctly.
Done poorly, tours negatively affect buyers’ perception of your asset and impact the outcome of your sale..
Sellers and brokers get this wrong all the time. It is common to see listings where:
The seller or broker is not present for the tours - sellers lack representation and control during the tour process.
Buyers overstep - staying too long, asking tenants questions, and intrusively inspecting aspects of the property.
Management personnel provide too much information, too little information, or the wrong information.
Tenants get upset by the disruption or try to get involved in the conversation.
All these situations lead to bad results on tours. Unfortunately, it is incredibly common.
These problems can (and should) be avoided.
Here is how
Make sure you or your broker will be on-site for all tours. You need to make sure your interests are represented while they are at your property. This is critical!
Schedule the tours on pre-arranged dates. Scheduling tours can cause a headache. On top of that, tours can be disruptive to the residents. Mitigate these problems by scheduling the days and times for buyers to tour the building in advance
Strategically select units to show. Buyers usually get to see only a few units during the tour. It’s a sample, not the entire building. What they see in the units will frame the condition of all the units in their mind. Don’t show them run-down or messy apartments.
Make a plan for the tour. Have a strategy of where to start, what to say, and how to end it. Map out the exact route through the asset and have answers prepared for questions you expect to receive along the way.
Conducting your tours strategically will make the sale process smoother and result in more interested buyers competing for your property.
Step 4: Schedule a Deadline for Offers
Controlling the timeline creates leverage for the seller in negotiations.
But sellers often don’t enforce a deadline which causes two common problems.
1. Buyers don’t reel urgency
Without a deadline, investors prioritize other tasks. Evaluating your property gets put on the back burner. They expect to come back to the opportunity when they’re less busy. But that day never comes. Evaluating your property never becomes a priority because you didn’t create urgency.
Set a deadline to encourage them to start analyzing this opportunity now, before it’s too late.
2. Never-ending negotiations
Without a due date, buyers often keep negotiating until they get what they want - a lower price. Their whole strategy is to wear out the seller.
Buyers will always try to get an edge, don’t give them the chance. Put all buyers on a level playing field so their only way to stand out is to make a great offer.
Set a deadline to stop negotiations so buyers submit offers on your terms.
Step 5: Counter Every Initial Offer
My last suggestion is to counter every offer you receive.
How you counter depends on how strong the offer was and how many total offers you received.
So let's look at three scenarios.
1. The offer was below your asking price by a lot.
Sometimes buyers will submit an offer far below their actual willingness to pay. They want to see if they can get away with it. Many sellers here just decline without a counter, ending the conversation. Give them a chance to respond, and many will make another attempt at a more realistic price.
2. The offer is at your asking price.
Buyers rarely start with their highest and best price. If they begin with an offer at your asking price, counter for more and see what happens. Or, counter with better terms such as higher earnest money, shorter inspection period, and/or faster time to close.
3. The offer is above your asking price.
If you receive an initial offer above your asking price, you’ve probably already followed every other step in this guide. Starting above the asking price is an indication of high motivation. It’s worth countering with an even higher price or better terms to see what happens.
Organize the process for marketing your apartment property and structure the bidding process. You’ll gain far more leverage and control over the transaction.
If you haven’t already downloaded the full eBook detailing every step of our pre-listing sale prep strategy, you can get your free copy by clicking below.
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