Should I submit under a broker or go direct? (major market)
I am a small fish with big backing in a large pond (major market). I have a very specific business plan and a finite # of properties I am going after and know I may only get one go around.
I have the right contact information for the owners, I am debating whether to go through a well established broker, instead of just throwing offers out on my own. I feel like as I am not a well known player I am worried even if it's a great offer they will either throw it out, or wonder how much it's really worth and go to a broker anyways.
On the flip side, owners (especially long time owners) I know hate paying commissions if they don't have to which I feel like would be my main motivation to go direct. I know these owners probably get peppered with broker calls anyways so it may be a motivation for them to not pay a commission.
Appreciate any thoughts.
Go direct. I’m not really sure what value any broker (well-known or otherwise) brings to the table that you couldn’t do yourself. What does the owner have to lose? In order for him to transfer title to you, it will need to be recorded at the registry of deeds, so very difficult to scam him. If the owner wants more credibility then you can show him your portfolio and proof of funds/bank commitment letter.
I don't think it's as much scamming them, it's more that they will have no idea who I am, but will recognize a top 5 brokerage name and know that they're not going to just throw out offers for anybody. I would think it would give me more legitimacy and a better shot is all. I could be wrong but that's my thought process.
If I were a seller, I would rather save on the broker's fee than pay for "legitimacy" all day long. Once again, how does the broker make you more "legitimate?" They will still ask for proof of funds etc...If you want to show that you are serious, then draft an LOI with an offer and nonrefundable deposit. Nothing says "I am serious" more than putting money where your mouth is. From the seller's perspective, if you end up "not being serious," they don't lose anything. The whole point of "legitimacy" is to instill confidence in the seller that you are serious aka legitimate, but once again, you can do all that without having a broker per the steps just listed.
Go direct. We do new ground up development and 95% of the deals we do, we’re buying off market.
I’ve never run into an owner that cares if you’re repped by a broker or not. Honestly most of the time they prefer there’s no broker so they don’t have to pay a fee.
But off market with a seller's agent coming to you guys or purely direct to owner?
Purely direct to owner
When submitting an LOI for a small deal I always go direct. Seller broker will like you more since they don't have to split comission, and seller may like you more if overall comission gets negotiated down since there's no buyer broker to pay.
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