All right. What’s up, everyone? Chris Kennedy here with Mayfair Real Estate, and in this video today, I’m going to walk you through some things that you can do to ensure a successful sale once you’ve decided that you’re going to sell a property. Now, my last video was about what you can do to prepare a property for listing or for putting it on the market whether you’re listing it or not. In this video, it’s going to be some tactics you can use to make sure that when you do decide to sell that property, you’re getting the maximum value for it and you’re ensuring that whoever is telling you they’re going to purchase that property you’re ensuring that they are actually going to close, but you want to maximize the chances that that offer will close. So a few things you can do.
Number one, selling a multi-family apartment building, multi-family apartment buildings are not mass market products. it’s a very specific group of people that will buy that type of product, and quite frankly, they’re relatively easy to find. People who buy multi-family apartment buildings own multi-family apartment buildings, and because we have a great a public records system here in the United States, you can check public records to see who are the other owners of apartment buildings in your neighborhood, in your county, in your state, dependent on the size of your property, and then contact those people to see if they want to purchase your property. Now, what I’m saying here, is you want to maximize the exposure of your property on the market, but you don’t want to maximize it to the mass market, everybody. You want to maximize it to the specific people who are qualified to buy who are likely to buy.
And why is that? Well, you know as an owner of one of these properties, it’s an operating business, you’ve got residents at that property. So what you don’t want to do is create a whole bunch of traffic to the property from people who are going to waste time, disturb tenants, and bring you nothing. You do want to create traffic from people who are well qualified to purchase the property. So the goal here is maximize exposure, but maximize exposure to the right people. There are lots of ways of doing that. A good broker can walk you through ways of doing that and will do it for you. But just simply having good contacts in the market of who is actually buying in the market goes a long way. So that’s point number one, maximize your exposure to the market, but to a very specific market. Not the entire world.
Point number two is you want to create scarcity or competition. So we are right now in a very strong seller’s market. It’s May 2021. The market’s crazy. Interest rates are low. There’s tons of capital in the market. There are lots of people looking to buy multi-family investments. So there is a genuine scarcity of deals, because not a lot of people are selling and there’s lots of people looking to buy. So there is genuine competition and scarcity. When someone lists an apartment building these days, you show up, there are multiple parties interested in it, multiple people visiting the property. This creates scarcity and competition. For you as a seller, when you’ve got a product that many people desire it automatically psychologically creates even more desire within those specific buyers. So just think about it when you’re purchasing anything, you go to buy a car. If you show up to the lot, and there’s one sales guy with one car and there’s nobody else on the lot, you’re the only buyers around, you’re going to try and negotiate pretty hard.
Contrast that with, if you show up and there are 15 other people interested in that same car, then guess what? You’re going to make probably your best offer, you’re going to write the best terms, and you’re not going to haggle too much on the price. So when you’re selling a property, you want to create that sort of feeling rather than the feeling that there’s nobody else interested in the property. Again, in today’s market, that’s just pretty easy because of the nature of the market. But even in a downmarket, a good broker will be able to create that feeling, will be able to bring multiple interests in parties, to your property, and create actual competition to drive up and improve offers. So having three offers in hand versus one gives you a lot more negotiating leverage. So that was point number two.
Number three, you want to make sure to qualify prospective buyers. Now this should go without saying, and it seems obvious, but quite frankly, a lot of people completely overlook this, and what happens is you might get a couple of offers on your property. The first thing that an inexperienced owner will do is look at the price, and sometimes that will blind the owner to the other things in the offer. So if the price looks very good, if it’s significantly higher than maybe other offers you’ve got, people have a tendency say, “Well, it’d be nice to get that extra money,” but maybe the chances of that offer closing just by looking at that contract, you would see the chances of that offer closing are much lower than one of the more realistic offers closing. Now, I’m not saying don’t try and get the best price you can. Absolutely do. But just keep in mind, price is not the only thing that makes an offer strong.
Tons of other things in a purchase contract or an offer that you should look at, things such as all of the contingencies that may be present. So an inspection or due diligence contingency. You want that to be as short as possible. A financing contingency, you want that to be as short as possible. Because any contingencies in the contract give the buyer a way out of that contract and enable them to get out of it after going under contract. So eliminating as many of those as possible is in your interests as a seller. So getting a high price plus strong terms in the contract is what you’re going for. And, again, an experienced agent or broker will be able to help you with that. All right, and lastly, point number four is you want to make sure to go ahead and qualify your buyers. Right now, this is extremely important.
And again, this is something that a lot of people forget to do or overlook because they get a good offer in hand, even good price, good terms, but they forget to actually vet the person or the entity that is making that offer. You need to know that the person making you an offer to purchase is actually qualified to buy. There are a lot of people in this business doing a lot of things trying to get properties “under contract” in order to control the property and then try and flip it to someone else. Lots of different things, you just need to make sure to qualify those perspective buyers. How do you do that? Well, I’ll tell you one of the simplest things you can do is just simply ask the question, “Oh, do you own other multi-family property in the area?” or, “Do you own other multi-family property period?” So somebody who already owns property is more likely to close on the property than somebody who owns no property. That’s pretty obvious, but that’s just something that a lot of people overlook.
Another thing, you obviously want to figure out if they are solid in terms of the cash that they have, or the financing that they are planning to obtain. So if you’re getting a cash offer on a property, you definitely want to ask for a proof of funds. You can’t just take somebody’s word for it, especially on a larger apartment building or a larger purchase price. You can’t just take somebody’s word that they have cash in the bank to close. You should be asking for it. You should be asking for proof of that. Give me an account statement. Give me a verification letter from your bank with a contact information on there, email, and phone number so that you can actually verify with a third party that this person has the money that they say they have and can close on the deal. The other thing is, if you’ve got a lender involved, you want to make sure that the person has actually qualified with that lender.
They should at least have had an introductory conversation with the lender where the lender has then requested additional information, gone through their assets, probably obtained a personal financial statement from that buyer, and at some point said to them, “Hey, you are qualified to buy, and if you find a property that meets X, Y, and Z criteria, we can loan you this amount of money.” So, again, if you’ve got a financed offer, you want to ask for the contact information of the lender and go ahead and contact that lender and make sure to verify that, that buyer can actually purchase. Those are just a couple of things. There are other things you can do to qualify buyers, but, again, get a licensed broker involved, someone with experience who knows what they’re doing, or get your attorney involved. If you do either of those things you’ll probably wind up okay, and do well in maximizing the price of your property when it sells and ensuring that the sale actually closes.
Okay, that’s it for me on this one. Really appreciate you
tuning in. If you found this valuable, then go ahead and subscribe to our channel. Give me a thumbs up. And you can also check out our website, MayfairRE.com, and you’ll see some of our services where we can help people to buy and sell investment properties. And we also have a property management division. Thanks a lot for checking us out. I’ll catch you on the next one. Thanks.