The Importance of Understanding Your Environment
I remember highlighting a sentence from Real Estate Brokerage: A Management Guide that read “What separates those who succeed from those who don’t is an understanding of the environment and the ability to adapt to its changes.”
This statement is ever present in our industry. Seemingly overnight brokers, young and seasoned, had to learn new terms and rules of engagement. What is the relationship from default to BOV to controlling an asset? Is a Chief Credit Officer senior to a Special Servicer? Or is the Receiver the most popular guy at the party?
At NAIOP, CCIM and SIOR chapter meetings conversations of getting in the REO game persist. However, very few brokers are realizing a significant market share in this segment over others. What separates the broker who successfully represents an entire account for a given bank, lender and/or servicer from the broker who might acquire a one off listing if any?
You must be able to surpass expectations by finding answers to meet the client’s needs. Before you can find answers, however, you must first understand what the client’s needs are. An example would be how to structure an offer to purchase an asset from a bank or servicer. Why is the offer structure important, an offer is an offer right? Wrong.
A bank has regulatory restrictions that they have to manage. Once a bank accepts an offer and opens escrow they are required to write down the asset to the offer price. Now consider three weeks of due diligence goes by and the buyer falls through. The bank has just realized a loss without disposing of the asset. Multiply that by a dozen assets or more and it could equal bank failure.
This is why it is imperative for a bank to only accept offers from qualified buyers (substantiated with strong financials, track record, and verification of funds) with limited due diligence timelines. One other very important thing to consider is to schedule the closing at the end of the quarter.
-Hayim Mizrachi, CCIM
Hayim Mizrachi is First Vice President and Business Manager at NAI Las Vegas.
About the author
Background & Experience: Mr. Carll is the Managing Director/Principal of NAI’s Las Vegas office and also serves as the Western Regional Director for Special Asset Solutions and the Director of the National Multifamily Advisory Group for NAI Global. Prior to joining NAI, he was a long term representative and senior managing director of Hendricks’s and Partners, a multifamily investment firm with 27 regional offices. Mr. Carll has over 14 years of multifamily investment property experience that he brings to the team and a proven track record in working face-to-face with pension funds, REIT’s, private and institutional investors which he has facilitated more than $600 million in acquisitions and dispositions of multifamily properties. Art took a brief sabbatical from his real estate career and for three years honed his exceptional negotiation and communications skills as a staff member of a Division I NCAA college football team and helped lead them to a 12-1 record in the year 2000. Art’s commitment to achievement and his proven track record continues to forge the way to be a dominant player in the commercial brokerage industry. Professional Affiliations & Designations: National Multi Housing Council (NMHC) National Association of Industrial and Office Properties (NAIOP) Certified Commercial Investment Member (CCIM) Las Vegas Chamber of Commerce Nevada Development Authority
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