What makes the broker value proposition so compelling that they haven't gone extinct yet? Interested to hear both sell-side and buy-side perspectives.
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Pretty easy to see the appeal from the buy-side, they do the work so we don't have to. Brokers make the marketing package, they make markets even if it's only 1-2 bidders, they spend the resources pushing deals and getting buyers interested in your deals, they screen the BS buyers who can't transact or capitalize the deal, etc.. Is it hard work? Not really. But, if you're a sponsor you'd rather spend time in asset management or acquisitions than doing all of the tedious work that brokers do to sell a property. If you're paying a small fee (in terms of total deal size) to not do the work, then why wouldn't you spend your time doing more productive things?
Can brokers really do a better job to screen the bs buyers than other industry participants?
If 50 people are bidding on an asset I list for sale, do you think my time would be best spent asking tedious questions to each one about their equity source and debt source, their transaction history, etc.? No. My time would be best spent finding other acquisition targets, development opportunities, or other asset management tasks. You pay analysts a salary not because they can run a model better than you, but because your time is best spent doing other things than diving into an excel sheet all day. People pay for convenience.
Donβt forget, brokers also front all of those costs associated and only get paid back if it transact. If anything, theyβre walking forgivable lines of credit.
Yeah I would say the deferred payment is a big plus
Oh look itβs the daily βman brokers add no value for all the money they makeβ discussion.
I don't have time to cold call property owners
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