In every transaction the goal of the buyer is to get the product at the lowest price or the best deal. Whether the product is a pack of gum at a grocery store, or a self storage property, the buyer's goal is to get the best possible value. As a seller, it’s very important to identify what your primary goal is. Most sellers want the highest possible price and the best terms for their property. However, some sellers want a fast, quick deal and are willing to leave money on the table.
As a seller, there are significant risks in accepting a direct offer. You are absolutely leaving money on the table, and in some cases, it can be hundreds of thousands or millions of dollars. A direct offer is never going to be at full market value and the terms will often be less than desirable. The buyer's goal is to acquire a property at the lowest possible price, which is why they are making offers directly to you. A buyer who is making you a direct offer is attempting to pay you a wholesale price instead of a retail price.
In the self storage industry, the ever-changing market will determine the price of a facility at any given time.
The only way to know what the market value is for your facility is to run a comprehensive and thorough marketing campaign by gathering offers from multiple interested buyers.
Working with an experienced self storage advisor through the selling process offers you the opportunity to run this methodical process.
Below is a list of some of the main benefits of hiring a self storage broker who can assist you in achieving your goals:
Allows you to generate multiple competitive offers to ensure that your property is valued properly and that all qualified buyers see your property.
Gives you leverage in contract negotiations as you have multiple back-up options.
Offers certainty of execution on the agreed upon contract terms.
Every seller is different, and it is important to know your goals before even looking at a direct offer from a buyer.
In a self storage sale, as soon as a contract is executed, all leverage switches from the seller to the buyer.
This allows buyers to make certain demands and potentially drag out the process much longer than expected. A typical game that some buyers play is to come back at the expiration of the due diligence period and ask for changes to the contract, such as a price reduction. If you only have one offer, you have no leverage to negotiate. Working with an experienced advisor will ensure you’re achieving full market value for your property and provide you with maximum leverage throughout the entire transaction.
It may be tempting to accept a direct offer from a buyer, however, you owe it to yourself to take the time to clearly define your goals. You’ve taken all the risk and worked extremely hard to create value in your business, so you should be rewarded for that.