Selling defaulted asset has changed a considerable amount since I started in the business in 1997. No matter what the asset class, sellers have always wanted to negotiate the fees and expenses being charged by their vendors. It is human nature to negotiate and I think, to a certain extent, these financials should be pushed.
What I find interesting is the extreme pushback on fees and exclusivity in the real estate market today.
As an asset manager as well as a brokerage manager I have a unique way to look at these things. On the one hand, I am sometimes the seller and decision maker. On the other, I am sometimes the brokerage or auction vendor.
A few months ago I started asking around about what was going on in other markets and looking closely at what requests were being made of agents in Columbus, Ohio.
I have talked to agents all over the United States. In summary, here is what most agents are thinking about these top 4 issues.
- Exclusive Right to Sell - Most successful brokers/agents polled will not spend time and effort promoting an asset if the seller demands carve outs. A broker is either hired or not hired. Generally, there is no third option as far as they are concerned.
- Commission Rates - Ask 10 brokers/agents and you will get a similar answer. Brokerage fees have absolutely nothing to do with what was paid for a property or what was loaned on it, just like bank CEO salaries and legal fees.
- Minimum Commissions - There are a lot of assets in many marketplaces that, today, have very low value. It is very common to have minimum commissions. There is a certain effort that goes into every property regardless of price.
- "Joe Will Do It" - "Joe will do it for less." "Joe will do it on these terms." Most agents know a "Joe" and will tell you there are reasons Joe will do this and that. Most will also leave it at that. Be wary of the agents that tell you the story. They are not going to keep your confidences either.
Overall this was a very interesting informal investigation with some interesting responses. Hopefully this gives some insight to those who hire brokers and agents around the US.
Do you have questions about distressed assets, receivership or bankruptcy sales, auctions? Email me at rfk@gryphonusa.com and I'll try to answer it in an upcoming post.
Richard F. Kruse is the President of Columbus, Ohio based Gryphon USA, Ltd. (www.gryphonusa.com). The Gryphon Organization includes Gryphon Asset Management providing receivership and consulting services in the distressed marketplace, United Country Gryphon Realty & Auction Group (www.ucohiorealty.com & www.ucohioauctions.com) providing real estate brokerage and auction services throughout Ohio and OnlineAuctionUSA.com (www.onlineauctionusa.com) providing commercial asset liquidations from the Midwest to East Coast.
United Country Gryphon Realty & Auction Career Opportunities Available. Call 614-885-0020 x 17
