Advantages of Selling a Mini Storage Direct
If you're at a point in your life or career that you're considering selling your self storage or mini storage facility, it's important to weigh your options. This is a huge financial decision and not one that should be taken lightly when being evaluated. When selling your mini storage you'll have two main options to pursue.
The first and perhaps most widely known is to list your mini storage a real estate agent or broker. This can sometimes be a good option if your facility is large and high performing as brokers can often get the listing out to the widest pool of potential buyers. However, there can be some significant downside to that which include commission payments, fees and competing priorities of an agent that has a number of self storage facilities they're trying to sell.
The second option to sell your mini storage is to sell directly to a buyer. While this can have the disadvantage of not offering the property to the wider market, it can have a number of advantages as well as discussed below:
When you sell your self storage or mini storage directly to a buyer, there is no commission to pay a broker or real estate agent. Typically agents will charge somewhere in the neighborhood of a 6% commission fee when they sell your mini storage facility and sometimes additional fees on top of that for marketing, studies, etc.. As an example, if your facility were to sell for $500,000 that would mean paying the agent or broker $30,000 in commissions alone! This fee can be eliminated entirely if you choose to sell your self storage facility directly to a buyer.
Nothing "lost in translation"
While we know that it's never the intention to have miscommunications between brokers, the sellers they represent, and buyers or buyer's agents, it's something that we see happen time and time again. Brokers often have a lot on their plates, especially if they're local and dealing with many different types of commercial transactions in addition to selling self storage. In these cases, communication can often jump back and forth between electronic, in-person, and phone and is not always in real time. When these messages finally make it to the buyer, there can sometimes be a "whisper down the lane" effect. Even if the details seem minor, they can sometimes significantly impact the deal. If the broker doesn't own up to the errors, it can also affect the buyer and seller's trust in one another and sometimes sabotage the entire transaction. When you're dealing with the buyer directly, there isn't the same kind of opportunity for these errors to occur.
No competing priorities (from agent)
As mentioned above, brokers that work on commission can sometimes have competing priorities and "chase the checks." If a property is larger, more expensive, better maintained, etc. brokers can often focus their attention on whatever the source is of their biggest and easiest potential commission.
Selling commercial real estate isn't a "one size fits all" business. Both sellers and buyers can see great benefits by being able to work with each other to come up with creative transactions to create a win-win based on everyone's priorities. This can be anything from a seller carryback (aka owner financing) for a short or long period of time, buyer's helping to take over issues regarding maintenance or vacancy prior to finalizing the sale, seller tax benefits from an installment sale type transaction, etc.
When buyers and sellers can collaborate directly it can often create great outcomes for all involved that are sometimes hampered by the "in the box" thinking of many brokers and agents.