Channels Brokers Use to Source Buyers

Author

David Wallace
April 22, 2024 • Estimated Reading Time: 7 minutes

When you hire a broker to list your multifamily property, it is important to know exactly how they will bring your property to market.

  • Who is their target audience for the listing?

  • What channels will they use to distribute the listing?

  • Do they know the most motivated buyers in your market?

  • What is their plan to generate competition between qualified investors?

Knowing the answers to these questions will ensure you hire the right broker to represent you in the transaction.

When you sell a property, you want to make the best deal possible.

Understanding your broker’s strategy for sourcing buyers will help you feel confident they have effectively marketed the property on your behalf.

This newsletter talks about the channels through which brokers bring listings to the market.

Contact Active Buyers First

What’s the first thing we do with a new listing?

We contact the investors who first come to mind.

This might seem obvious, but it’s important.

Here is why.

The investors who first come to mind will often be the most active and motivated buyers in our market.

Experienced brokers will know who is particularly motivated to acquire properties. We pay attention to

  • who is in a 1031 exchange

  • who is well-capitalized

  • who has the operational capacity to onboard more units

  • who has well-defined acquisition criteria

  • who has been actively hunting for deals recently

When I bring a new deal to market, I want motivated investors to know about the opportunity early in the listing process.

They are the most likely to make an offer or provide quick feedback.

Investor Database

Many brokers have a Customer Relationship Management (CRM) system which acts as a database to track properties, owners, investors, and vendors.

For example, my database has around 18,000 multifamily properties in the Minneapolis MSA and includes over 8,000 contacts.

I can sort and query the database to narrow down a list of investors based on their acquisition criteria.

After filtering my database based on investor preferences, I have a list of people to contact about the new listing.

I start by contacting those investors whose investment preferences most align with the assignment at hand. Then I work my way down the list, contacting every potential buyer.

Because our database contains nearly every multifamily owner in the Greater Twin Cities Area, the end buyer for your asset is likely on our list.

Having a detailed CRM system is an incredibly powerful asset for a broker and their clients.

The next time you’re interviewing brokers, be sure to ask them about their investor database and how they plan to use it to reach potential buyers for your asset.

Email Blasting

Most brokers use an email marketing platform to distribute JUST LISTED emails.

Maintaining an engaged audience of potential buyers offers scale that is difficult to match with more direct approaches such as cold calling.

I can send an email to 5,000 people with a few clicks, but it would take a long time to individually contact that many people.

The important thing with email blasting is not how many people are on the list.

What matters is the click-through rate. How many people open the email? How many investors view the offering memorandum?

Email blasting works best when the email list is segmented based on investor preferences. We want to maintain an engaged audience by sending emails that are relevant to the receiver.

We can sort our email distribution list based on the size, location, condition, and pricing of a listed property and match it with the acquisition criteria of our audience.

Email marketing is an excellent strategy to efficiently reach hundreds or thousands of investors.

Buyers can join our email distribution list by completing this Acquisition Criteria Form:

Listing Sites

There are several online marketplace sites where brokers post listings.

The most popular sites include Crexi, Loopnet, CoStar, and RCM. Smaller properties can also be put on the local MLS, Zillow, Trulia, Realtor.com, or other residential marketplace sites.

Listing sites are a useful resource to ensure the listing is visible online.

No matter how many contacts are in a broker’s investor database or email list, no one can know every single potential buyer.

Online listing sites fill in any gaps in your broker’s database and email list. They ensure exposure to anyone looking to purchase multifamily assets.

However, a word of caution.

Using these sites is often a crutch for brokers who don’t have established relationships or well-built CRM systems and email platforms.

The best buyers don’t often shop online for deals. They are used to receiving opportunities directly. Meaning, even if your property is listed online, you could still be missing an important segment of the buyer pool.

Marketplace sites should be a supplemental channel in a marketing strategy, not the primary approach.

Broker Cooperation

Buy-side brokers often have qualified investor clients. We want to encourage these brokers to bring their clients to the table.

Trouble is, many list-side brokers refuse to split commissions.

I understand the incentive here. If I source the buyer, I get both sides of the commission. If another broker sources the buyer, I get half.

I work hard to source the buyer for my listings and earn both sides of the commission. But if another broker’s client is interested in my listing, we want them to participate.

Buy-side brokers don’t present listings to their clients out of the goodness of their heart. They simply won’t bring a our listing to their buyer if they will not be compensated for it.

Commission “hogging” only benefits the listing broker while reducing the buyer pool for the seller.

My goal is to help clients get deals done with the best available price and terms. If another broker brings a great buyer to the table, I’m happy to split commissions.

Conclusion

Creating a competitive market for multifamily properties involves using multiple channels to attract investors to each listing.

We use a variety of direct approaches including contacting the most active buyers, leveraging our investor database, and utilizing our email marketing platform.

We also ensure maximum exposure by making listings available online and working cooperatively with other industry experts.

Using these channels, you can be confident the most motivated buyers will compete for your asset.

Contact Us

I hope you enjoyed this article.

  • Have any questions about this article?

  • Want to learn about our current listings?

  • Considering a sale of your property?

Drop us a line today.