I am wanting to sell my 45 unit park in MN. I have had multiple brokers contact me for a listing. I have shown interest in selling, so they continue to pester me. I have been a bit hesitant to list the park due to the commission I would have to pay along with the idea that most buyers would prefer to buy direct from seller anyhow.
I have dealt with several buyers who have cold called me or sent post cards asking if I would like to sell. 2X over the last year I have signed a purchase agreement with this type of buyer. In both cases, I am not aware of any due diligence having been done by these buyers. However, a week or 2 before closing I get a call or email from these buyers asking me to renegotiate the price. This does not go well with me so I send them a cancellation of contract and tell them that I am not willing to renegotiate. I feel that is a fools game. I am looking for a good rock solid buyer that I know will buy my park without the hassle of dealing with a re-negotiator. Where can I find this buyer?
Would you think listing with a broker would yield a better result? or do I just need to keep trying to sell directly to a buyer hoping I can eventually find one that doesn’t play these games?
A broker will help you weed out the buyers who aren’t genuinely interested and they usually have a large amount of buyers who can and are willing to close. Any potential buyer may try to negotiate your asking price down. It’s said that a broker will get you a better price for your park than you could selling it yourself. If you don’t have the time or patience to do it yourself, a broker might be good for you. You could always try to negotiate the broker’s fee if you want to put more money in your pocket because the demand for parks is high right now.
As both an owner and an MHP broker, I can tell you from my personal experience that hiring someone to help you sell your property is worth it.
I typically do not represent myself when buying or selling for myself. Yes, that’s counterintuitive, but here’s why: Emotional Attachment.
Having a Broker involved serves many purposes. One of them is having a buffer between you and the buyer.
For instance, when you deal directly with the buyer and they send you a re-negotiation your instinct has been to just cancel the deal. Well, is that your best move? Probably not. A broker will bring some “common sense” to the deal.
Also, going from step one to closing is a lot of work. Believe me, as a Broker we earn that money.
I recently Listed a Park in CA. We spent HOURS with Tire Kickers etc. Hours on the phone, title, escrow, lending, insurance, leases, due diligence, etc. The list is long. Lots of hand-holding etc.
If you are serious about selling your park I suggest you hire a local MHP expert or a National Firm.
A broker can help you weed out the buyers who won’t use. Also, think of it this way - I get you don’t want to use a broker and pay the fee, but if the broker charges you $150K to sell your park, but gets you an offer $250K above the two offers you’ve accepted and cancelled, you made an extra $100K after fees.
You won’t necessarily know what due diligence a potential buyer has performed. Renegotiation is very common in any real estate transaction,m. I agree with those who’ve implied you may be too close to the deal to think through potential buyers’ concerns, and that a broker might help in this arena.
What I don’t understand is why you’re not even talking to realtors. Listen to their pitch. Find out what price they’d list the park for, and what marketing activities they’d pursue. You have nothing to lose on talking to brokers.
Your story is exactly why you use a broker. We work with buyers and sellers on a consistent basis, can tell you who has a history of re-trading on deals and who is reliable. The highest offer isn’t the best the majority of the time and many investors do that simply to lock you into a contract and revise the offer after putting you through the ringer for months.
If you used a local broker (in the area who specializes in MHPs - not hard to find out who the top ones are in your area) they will know who is a reliable buyer and who isn’t. It’s a seller’s market, get it listed with a broker who knows what they’re doing and specializes in MHPs in Montana. Let them market it and create some competition otherwise you’re leaving money on the table (and even more importantly your time). Any broker worth their salt in this market would have recommended some non-refundable money upfront and if you marketed it you would have plenty of investors willing to do so if you can present the property, DD materials & financials in an easily digestible way.
I’ve watched owners go through your exact situation many times at best they waste 3 months of their life in escrow before getting re-traded, at worse they end up cutting their price and selling below market value (sometimes grossly below market value). As long as investors continue to reward these bad practices they will continue.
@picassomcp…I will make you the BEST DEAL than ANYONE and EVERYONE offering to buy your park in this thread! JUST KIDDING EVERYONE!
I’m just smiling when I saw this thread pop up on MHU as it is like throwing blood in shark infested waters. However, @picassomcp right now is a sellers market so you should have no problems selling your community. As a seasoned investor I personally will not buy from most industry brokers in today’s market because they are too aggressive, but I will use them to sell. I have purchased a couple of MHP’s recently from brokers who are not as familiar with the MHP market and they value a MHP like a residential home. Because you are asking your question in this forum my recommendation would be to use a broker with experience in this industry. If I were you I would interview Glenn Esterson from Marcus & Millichap, Kevan Enger at Capstone, and Mark Wisely from Wisely Commercial Reality to name a few and see if you click with any of them. Most any seasoned investor would agree that these are all nice brokers.
Personally, I currently own a small community in Minnesota, but it is one of the highest regulated states for mobile home parks, so it would have to be a ridiculously good deal fro me to purchase another MHP in this state. ANYONE issued a new MHP license in Minnesota in a community with ten or more homes is required to have an on-site tornado shelter, and an onsite manager. Any home manufactured after June 1, 2009 must be installed to manufacturers specifications AND on frost-depth footings or an approved alternate (such as an engineered slab design) no matter where it is located, which adds significant costs to infill. If you have significant infill, getting new homes now is much more costly and backlogged. Lastly, new rent control measures are currently being proposed to CAP at 3% which, if implemented, will severely curb your ability to sell at a decent price.
In conclusion, if you are defiantly going to sell, now is the best time and use an experienced, qualified broker. On the other hand, if you do not have to sell, why kill the goose that is laying the golden egg?