15 Oct 2024
Words Trudy Crooks Informer

Prep for sales success, not failure

If your agent isn’t asking you the right questions, perhaps you should ask whether they’re the right agent for you, writes ResortBrokers Managing Director Trudy Crooks.

I often hear from my brokers that some clients query why ResortBrokers asks for so much information in preparation for a potential listing.

‘Why do you need all this?’ is the general refrain. ‘No other agency has asked for this information. Why are you?’

Actually, I’m glad we’re being asked this question because it means we’re doing our job properly. And most of our clients, despite their initial hesitation, eventually see the good sense of why we do it.

So, why do we ask for your last three years’ trade, up-to-the-minute P&Ls, ADRs, occupancy, condition reports, legal documents and the like?

Because we’re setting your sale up for success not failure.

Believe me, if your agent isn’t asking you these questions now, your buyers will later. In this market, buyers are more rigorous. And they have options. We’re increasingly seeing more and more stock come to market.

There’s no question we’re in a changing market. Getting a deal agreed is one thing, but getting it settled is another. The agent who asks you the most questions is the agent who’s trying to think of every conceivable situation buyers might raise in due diligence.

Sure, we could sell you blue sky (many agencies do) but we’d rather not waste your time. ResortBrokers has always prided itself on being straight with our clients. This may lose us listings on occasions, but we’d rather be honest, even if that means the brutal truth.

Some agencies will tell you what you want to hear. Blue sky out to the horizon!

Here’s one way to put those agents to the test: ask for comparable sales. If they can’t give you up-to-the-moment deals then dare I say be very cautious about giving your listing to that agent.

If that agent gives you a deal from when we emerged from Covid, forget it. Buyers are more than aware the Covid sugar hit has gone.

The market has moved. If an agent told you something eight to 12 months ago, it’s ancient history now.

Also be wary of agents who recommend taking your asset to market via an expressions of interest (EOI) campaign. This, as you know, is when you don’t put a sale price on your asset but rather let the market decide the price.

It’s so much easier for an agent to tell a vendor, ‘Hey, let’s not let me decide, let’s let the market decide.’ Rest assured, this agent doesn’t know what’s happening in the market or isn’t willing to tell you news you don’t want to hear. 

I’d have a number of experienced buyers tell me recently they won’t look at EOIs these days because it says to them the seller wants too much for their asset or the agent doesn’t know how to sell it.

This is not the market for EOIs.

Two years ago, when the market was much hotter, ResortBrokers was doing more EOIs. In this market, we’d seldom recommend an EOI unless the asset was so special, and the anticipated demand so high, that we wouldn’t want to restrict its value. A good example is Queen’s Wharf Residences, which ResortBrokers is currently marketing the management rights to. Queen’s Wharf Residences is part of the $3.6 billion Queen’s Wharf Brisbane integrated resort, the largest private construction project ever undertaken in Queensland — a one-off, historic, game-changing building.

In this market, we’re mostly selling assets with a price tag, one that’s soundly based on the asset’s financials. In many cases, we’re getting above asking price because we’re creating interest that is generating enquiry that is leading to competition.

These days, the most self-defeating thing you can do is put your asset out there at an unrealistic price and then fail to get a result. It either fails to attract any interest at all and becomes a stale listing, or its price tag won’t stand up to scrutiny in due diligence.

There’s nothing more heartbreaking than seeing deals fall over due to lack of preparation. Better to list your asset properly at a price you know you can defend, and make sure you have everything ready to go in preparation for due diligence.

Vendors obviously want the best price. And, obviously, as agents we want to get you the best price. If you can’t get the price you want now, then work with an agent you like and trust (hopefully us) and have an open-book policy.

We sit down with many of our clients every quarter to review their financials. We can see how they’re tracking and tell them the sale price they have in mind is achievable once they get their net profit to a certain level.

Best thing to do is have a strategy. Some of the best operators in this business pretty much know the date they’re going to put their asset on the market, then execute a plan to work towards it.

As the old saw goes, “If you fail to plan, you’re planning to fail.” END