Buyers of real estate need competition. Almost all buyers say they don’t want competition, but they subconsciously need it. It doesn’t matter whether we are talking about commercial real estate or residential. They all want the feeling that that they beat the competition and won the race.
Take a simple sale of a home or a car for example. When the buyer shows up and hears you have other people that have called you already, it sends a message to the buyer’s subconscious mind that’s says, ok, if you want it, you better act now. In commercial real estate (hotels) I have said thousands of times, “the best way to close buyer number one is to have buyers’ number two and three already lined up.” It is the competition that validates the purchase for the buyer and every buyer says they don’t want it, but they all really do.
Most any commercial buyer will tell you they want to buy investments off market. This means that the investment was not marketed to other buyers, rather it was a quiet deal. That is what they tell you they want and many times they believe it, but it is not true. It is subconscious. They will never admit it, but they want to know there are other people that want the same deal.
Having other people that want the same deal validates the purchase. The worst transactions I have ever gotten into were ones where we were working only with one buyer. When that happens, the one buyer (will never admit it) begins to believe they have leverage over the seller and that one fact is the problem. That believe is the catalyst to the buyer wanting to renegotiate the price and terms because they feel they have the control over the seller. This is the quintessential reason a seller should never try and sell their property without a broker. It sounds self-serving, but it is like being your own lawyer at trial. Bad decision. It doesn’t matter if you are buying a home, car, office building or hotel. All buyers subconsciously want and need the validation of other interested parties.
A perfect example of that was a conversation I had last week. We are selling a deal and the buyer ask me on the phone if I have other parties that wanted the deal. What he was really asking me was to help him validate the reason he wanted to purchase it. The one and only way to help someone validate a real estate transaction is to have multiple people wanting the same deal.
So, like many things in life, what you say you want could be very different from what you actually want. KT