For an owner to try and sell their commercial property themselves is like a person being their own lawyer in court. There is an old English proverb that says, a man who is his own lawyer, has a fool for a client.
I had this gentleman recently that just knew everything about everything and wanted everyone to know he was smarter than anyone else. If you don’t believe it, just ask him. Ha
He ran me the through the traps to get information for the sole purpose of educating himself, so he doesn’t have to pay a broker. He was a real gem of a guy. What he missed is the real reason someone needs an advisor between him and the buyer. The advisor can speak about enhancements to the hotel management. It is impossible for an owner to talk about improvements the buyer could make because the buyer just looks at him wondering why he hasn’t done it himself. The owner speaking for himself, loses all the upside conversation.
Secondly, an owner that wants fans instead of friends, always wants to come across as the smartest person in the room. In fact, his ego demands it. The problem is, it leaves no improvement (in the buyer’s eyes) so the buyer just walks away. I have had very accomplished sellers and I have had seller’s that are terrible operators. I will take the terrible every day of the week. Reason, it shows upside to the buyer and the buyer leaves with the belief he can improve the property.
There two fundamental reasons why any buyer buys any commercial real estate. One – they can get a loan, two – they can see some upside. That’s it. Therefore, if they can’t see some upside, they absolutely will not buy it. So, the owner that wants everyone to see how smart they are just shoots himself in the foot because he tried to save an advisor fee.
There are situations in every person’s life when they need an advisor, a go-between, an advocate, a representative, etc. Basically someone in between them and the other side. Not every time, but many times, the money you pay an advisor is the best money you can spend. KT