Do you own a piece of real estate that you wish you could sell? Do you want to ensure you maximize your return on this investment and get the highest possible sales price and profit? Creating a feeding frenzy for a property has helped others to maximize their sales profit. It can help you too.
Any good sales person or negotiator knows that the more parties that are bidding for a property the higher the price is likely to go. If you have the patience and a plan you can create a feeding frenzy for your property. It takes time to develop the buyers, but it can be done.
Several years ago I was considering how I might maximize the sales price on a piece of land. From a past experience as part of a sales team that sold a company for $145 million I had learned how effective it is to develop a feeding frenzy and a buying competition between multiple companies. I determined that I would do my best to create a buying frenzy for the land I wanted to sell. I decided that the best way to do this would be to visit multiple well-heeled land developers and spend time introducing them to the property while extolling its virtues.
I started by developing a list of developers and investors that I knew were hungry for land. Most of these were residential developers, but some were real estate investors, commercial land developers, and land brokers.
Next I developed my sales presentation. I focused on the location of the property. It was located on a busy highway, which would give the property lots of traffic. I got documentation from the city that indicated that the property could be rezoned to a commercial property which would make it much more valuable. I took pictures to show the view the property had. I researched the development going on around it so that I could make the case that this was a high growth area. Over time I refined my sales presentation so that it became ever more compelling.
Over the next several years I visited every one of these developers and talked to them about our land. I took maps to show them the land and to explain why this land was perfectly positioned for a development. I helped them to see how buying this land could give them a quick multiple on their money. Each developer and each potential buyer was invited to visit and walk the property with me.
Initially the buyers would tell me they had no interest. This may or may not have been true. The importance of this first step was that I had identified whom I wanted to sell to and I had introduced the property to them so that it showed up on their radar as a possible acquisition candidate. I let them know that we were in no hurry to sell, but that we would consider offers as we had our sights on something else.
Patiently I pursued this course of action for a long period of time. It took time, effort, and commitment. As I had hoped, each of the contacted potential buyers added the property to their list of possible acquisitions to consider for their future development plans. Had I not made the effort to call this property to their attention it might have never been on their acquisitions lists. These were mostly large companies that I knew were the biggest developers in the state. One of them was the largest homebuilder in the nation. I waited for them to become hungry for the land.
Soon, there were requests for more information. Some of these potential buyers began to plot map the land for possible development and to run the numbers as to what their return might be if they were to develop the land. Real estate brokers became aware of the land as a result of the activity and soon introduced it to their customers. This increased the size of the list of potential buyers.
Eventually, one of the targeted buyers presented a letter of intent to buy the property. That was my signal to re-contact all the other potential buyers to let them know the land was in play, and that if they wanted to buy the land themselves they would need to act fast or it would be gone.
Suddenly they realized that one of their target acquisitions was about to go the competition. This not only made the value of the land more credible, but it created a sense of urgency for them to look harder at the property and consider moving up their timeline on the considered purchase. Every good sales person, and every good negotiator knows that you need to create a sense of urgency in your buyer if you are to get them to buy and, more importantly, get them to pay top dollar.
Over the following months there were a number of letters of intent that were received. The list of potential buyers expanded to about ten actively engaged suitors. One buyer was played off against another until we finally signed a contract with a buyer who actually followed through with the purchase. The purchase price was over 200% above what the initial buyer????????s letter of intent offered as a price. Making the effort to create a portfolio of multiple well-heeled buyers had paid off in spades. The deal was consummated and an outsized profit was realized.
That was not the first time I had run this strategy, and it won????????t be the last time. When you can multiply your profits by patiently developing a feeding frenzy why not do it every time you have a large property to sell? More buyers competing for your property is usually better than less buyers competing.
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