The InSite Difference: Managing Transactions
“Managing Transactions” is the second pillar of the Insite Difference. In the course of our work, we interact with brokers who believe their job is done once a Purchase and Sale Contract is signed. For us, our real work begins with a signed Contract. The nuances and intricacies inherent in commercial real estate transactions make the time between a signed Sale Contract and a Closing subject to many uncertainties, and therefore risks to our clients. Great brokers will use their experience and wisdom to identify and mitigate those risks, and thereby increase a client’s chances for a successful transaction. Proactively managing the transaction process from Contract to Closing provides significant added value to our clients.
The Ownership Life Cycle
Owning commercial and investment real estate has a life cycle. Our clients acquire property in different ways and for different reasons. They may buy a property for their business, inherit one from a parent or spouse, or proactively purchase one to meet a specific investment or business need. Upon acquisition, the property is an asset performing its intended function. Unless our client has a time horizon, in an ideal world we advise them to keep their property for the rest of their lives and, upon death, bequeath it to a family member in a tax-deferred exchange.
However, now painfully evident in our current circumstance, we do not live in an ideal world. Instead, life often intervenes, sometimes beyond our control. Clients may decide to retire or relocate, or that they want to spend more time with their family or travelling. They may need to divorce themselves from a marriage or business partnership. They may no longer have the physical strength or temperament to manage their property and its tenants. Finally, a health emergency may lead them to reconsider their priorities. For any one of these reasons, their property, once an asset performing its intended function, has now become a liability keeping them from spending their time and energy on activities that now have higher priority.
With clarity about how their personal circumstances have changed, a client may determine that selling their property is in their best interest. And the cycle begins anew with the Buyer.
The Cost of a Failed Transaction
Not all Sale Contracts lead to a Closing, and there are costs involved. Easy to identify are the legal costs. But depending on the project’s scope and the approvals required to satisfy contingencies, the parties may incur costs for Architects, TIF consultants, Traffic and Parking Studies, Engineering and Environmental Reports, to name a few. These additional, soft costs can run in the tens of thousands of dollars. If the deal falls apart, these become sunk and irretrievable monetary costs.
But a failed transaction can take an emotional toll on our clients as well, delivering a jolt to their new plans and expectations. With 60+ years of combined business and real estate experience, InSite brokers deliver on a mission to help our clients succeed by anticipating and overcoming the inevitable obstacles that arise in a commercial transaction. As such, great brokers will increase the probability of a successful sale, and that adds significant value.
Commercial real estate is a challenging and gratifying profession. We get to meet incredibly interesting and entrepreneurial people, and we learn something new every day. The most exciting and satisfying scenario demands our creativity, resourcefulness and persistence to overcome a seemingly intractable obstacle. It is always about delivering success for our clients.
The ability to manage transactions from a signed Sale Contract to the Closing is a major differentiator among brokers. With a depth of experience in business, finance and real estate, the team of InSite brokers fully understand and appreciate the nuances and intricacies unique to commercial real estate transactions. In this way, we offer clients a more secure approach to achieving success and pursuing their new priorities.
Learn more about Ross Goldstein.
************************
The InSite Difference consists of four carefully selected points of differentiation, each derived from our belief that there is a GREAT way to represent our clients. We aspire to be GREAT brokers and our client list of business owners, investors and developers recognize and appreciate this commitment. The four pillars of the InSite Difference are:
Maximizing Owner Value
Managing Transactions
Making Markets
Providing Decision Advantage
This article focuses on the second pillar: Managing Transactions.