(Summary:)
A family trust wanted to sell a 10,000 sq. ft. industrial building in Santa Clara, CA in order to donate the proceeds to charity. This trust property building has deferred maintenance and was appraised at $3.5 million. With the help of the Ivy Group, and within a month of targeted marketing, the seller received five offers, and the second buyer even increased his offer by $100,000 more than his original offer.
However, when the same buyer requested a $100,000 discount before closing, CEO of the Ivy Group, Tim Vi Tran (top commercial Realtor® for more than 25 years, with both coveted SIOR and CCIM designations) advised the seller against discounting, based on his analysis of the market and the buyer’s motivations, leading to a successful sale at the right price, achieving a favorable win-win outcome for both the seller and the buyer, by:
This is the second time the seller retained the Ivy Group as their trusted advisor and broker. In both sales, Tim secured multiple offers, one of them being all cash without financing contingency.
(In the next case study Tim will recall how the family trust initially retained him to sell a property in Newark, CA. – Stay tuned!)
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A family trust owning multiple properties throughout the Bay Area wanted to sell a 10,000 sq. ft. industrial building in Santa Clara, CA in order to donate the proceeds to charity. This was the second time the family retained the Ivy Group, based on prior success and outstanding service they had experienced with Tim Vi Tran.
This time, they were selling a Santa Clara trust property commercial building for a different reason: The family picked this three and a half million dollar building to donate to charity, per the deceased father’s wishes. “At the end of the day, it’s still a sale. Whatever proceeds they get, they will send to their favorite charity and get a big tax write off,” said Tim.
The company the family trust hired that specialized in charitable real estate gifts was based in New Mexico without a presence in the Bay Area and California real estate license.. Since Tim did a great job selling their property before, the family recommended the Ivy Group to the company in New Mexico, who interviewed Tim and hired him on the spot.
Tim analyzed and valued the property and put it on the market for sale in its “as is, where is” condition. The property has deferred maintenance, and the price reflected as much. Within the first month of targeted marketing, the seller received five offers.
While the seller was focusing on the first buyer, who was financially stronger, the second buyer was so motivated that he upped his price by $100,000 without the seller ever countering his original offer.
Then the first buyer backed out of his offer due to the work and time involved to fix and repair the building.
“We knew that the second buyer was very motivated, because when we were touring the property, I was listening to all the things that he was telling me: he needed to find a building because his landlord was kicking him out in two months. The reason was that the property owner was going to demolish the building to redevelop it, so the buyer needed to move to a new building soon. His original offer was $3.4 million. Then he countered himself twice, first increasing the offer by $50,000 and then another $50,000 because he wanted the building so much. Even though he was not our first choice in the first round, we ended up working with him and he ended up closing the deal,” recalled Tim.
“So I was listening to him. He needed to move out and he needed to get a loan. We gave him the time to get a loan and do the inspections and everything. And at the very end, when it came time to remove contingencies, he was thinking: the roof is leaking, the parking lot needs to be repaved, and some old, broken parts need to be fixed, nothing structural but cosmetic. So he asked for a $100,000 discount, after he had countered himself earlier to offer $100,000 more.”
When the family trust asked Tim for recommendations, Tim advised: “Number one, even though the building has deferred maintenance, we already adjusted the price from $ 3.7 million to $3.5 million with the understanding that the building was to be sold as is, where is.” Tim advised the seller to reject the $100,000 discount since the buyer was very motivated and countered himself twice.
“Number two: I don’t think he would cancel this deal with us, since there’s no other building within the same price range in the same location, because it was a special industrial building that’s been approved by the health department for food production. And it has a lot of power.”
“Number three: when the buyer requested ‘give me $100,000 discount, then I will remove all contingencies’, I advised that we don’t need to give any discount since the price was already discounted. Eventually, the buyer did remove all contingencies anyway without getting any discount. So I felt like I saved the seller $100,000”, said Tim.
“I do more listening than talking, listening to all his pain points, collecting data in my own ways, learning all the information, hearing all the comments, everything.”
“And I’m looking at the market, and I’m evaluating it all, because anybody could threaten to walk away, and some of them have walked away. But I didn’t feel like this guy was going to walk away. And that was my gut call. Of course, I ran the numbers. I valued the property correctly, and we got two different appraisal reports that said this building was worth this amount of dollars based on the current condition.”
“Even if this buyer backed out, we had three other offers. The only drawback is, if this buyer backed out, we would have to start all over, go through the whole 60-day due diligence process again. I guess we made the right decision, the buyer’s happy, and the seller’s happy.”
What distinguishes a top notch Realtor®? As we summarized above:
Tim earned the seller’s trust after a previous experience. How the seller met Tim the first time was quite an interesting story.
Tim will tell the story in the next Case Study.
When you need to sell, buy, or lease a commercial property, the Ivy Group is ready to help you reach your goals. With more than 100 years of combined experience and expertise in real estate, investment, technology and engineering. Contact us with your next real estate needs.
