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Who Will Win the Bid?

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  • Who Will Win the Bid?

    There's an office building in our town that has sat empty for... I want to say at least 5 years. It was originally built in the early 2000s by an insurance company to house their phone operators. But since then, they changed to having all their operators work from home. In 2012, they sold the building for just over $1 million. There was some talk of other businesses moving in, but that never panned out. So last year, the owner sold the building at auction. They got $150,000 for it.

    It's a nice building. Or at least, it was. Scuttlebutt is that this winter, the sprinkler system froze and flooded the building. After the cost of cleanup and no renters to be found, the current owner is looking to sell.

    Here's where my Bank comes into the story. My boss, the Branch Manager, has spoken with two separate local companies who want to buy this building, each represented by a different realtor.

    The first company is a local family whose primary business is an auto body repair place. The sons also do small engine repair, construction, yard maintenance, etc. They're a hard-working family, but they struggle to make ends meet. They want to buy this 10,000 square foot building, move their auto repair into the back, and rent out the front offices. BM is reviewing their financials, and they're ok but nothing special. The biggest issue is they don't have anything saved up for a down payment, so BM is thinking he'll have to ask them to put up additional collateral, such as their house.

    The second company is a husband and wife who run a successful construction company. They have enough saved up that they could pay $75k for the building outright, but then they'd be tapped out. They want to pay cash for the building, then get financing to refill their savings account. They want to use part of the building for housing their fleet of vehicles, storage for building materials, and then renting out the rest of the space.

    Due to privacy concerns, BM can't tell either group that he's working with the other group to finance the purchase of this building. Whichever gets completed first will likely win. Whoever doesn't get the building will probably be mad at us. And their realtor even more so. Realtors hate to lose out on commission. BM is treading lightly while working just as hard for each of these customers.
    "I look at the stars. It's a clear night and the Milky Way seems so near. That's where I'll be going soon. "We are all star stuff." I suddenly remember Delenn's line from Joe's script. Not a bad prospect. I am not afraid. In the meantime, let me close my eyes and sense the beauty around me. And take that breath under the dark sky full of stars. Breathe in. Breathe out. That's all."
    -Mira Furlan

  • #2
    For residential properties multiple parties will submit offers and the seller will decide which one gets the deal.

    Is commercial real estate different? Does the owner have a say in who gets to buy their property?
    "I don't have to be petty. The Universe does that for me."

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    • #3
      I'm not actually sure what the situation is in this case. I get the impression that the seller wants to offload this property that's costing them money instead making money for them. It sounded like the flood and cost of cleanup was the last straw. Plus I can't imagine paying $30k in property taxes every year for an empty property. I haven't seen the property actually listed anywhere, so I don't know how these two companies found out about it being for sale.
      "I look at the stars. It's a clear night and the Milky Way seems so near. That's where I'll be going soon. "We are all star stuff." I suddenly remember Delenn's line from Joe's script. Not a bad prospect. I am not afraid. In the meantime, let me close my eyes and sense the beauty around me. And take that breath under the dark sky full of stars. Breathe in. Breathe out. That's all."
      -Mira Furlan

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      • #4
        Yer kinda damned if you do and damned if you don't o_O Even if you could reveal to each party that the other was interested, I'm thinking they would both accuse your company of doing so in order to financially benefit your bank and raise the price, despite the fact that it's the owner and Realtors who would most likely benefit far, far more from the sale of the property x.x

        The worst part is: The MLS records are accessible to any others in the business. My guess would be that one of them is likely the one who is "officially" selling the property; I guarantee you that, if the property has been formally "listed," the non-lister knows about the other guy. The reverse may also be true. Any agent or Realtor in the market can show the property, make the sale, and claim part of the commission. The listing guy gets part of that no matter what; just less if someone else sells it. (source: a family member is one)

        IA: I'm 95% sure that the seller can choose which offer to accept. I could absolutely be wrong
        "For a musician, the SNES sound engine is like using Crayola Crayons. Nobuo Uematsu used Crayola Crayons to paint the Sistine Chapel." - Jeremy Jahns (re: "Dancing Mad")
        "The difference between an amateur and a master is that the master has failed way more times." - JoCat
        "Thinking is difficult, therefore let the herd pronounce judgment!" ~ Carl Jung
        "There's burning bridges, and then there's the lake just to fill it with gasoline." - Wiccy, reddit
        "Retail is a cruel master, and could very well be the most educational time of many people's lives, in its own twisted way." - me
        "Love keeps her in the air when she oughta fall down...tell you she's hurtin' 'fore she keens...makes her a home." - Capt. Malcolm Reynolds, "Serenity" (2005)
        Acts of Gord – Read it, Learn it, Love it!
        "Our psychic powers only work if the customer has a mind to read." - me

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        • #5
          Yeah, very much damned if we do, damned if we don't.

          From another angle, too. Goodhair got involved yesterday, giving BM instructions for how to word a pre-authorization letter for Company #1. When BM talked with Ted today, he mentioned this letter, and Ted flipped. Something about how we can't do that sort of a letter because it puts liability on the Bank. So BM told Ted to have it out with Goodhair, and once they decide whether we're going to consider financing for Company #1, to let him know. BM is rightly upset. He's getting caught in the middle, having to go back and forth with the customers. He had to have an awkward conversation with his contact from Company #1 this morning. "Yes, I know I told you yesterday you were approved, but then two of our board members were conflicted about it. Once they work out their differences, I'll let you know." Company #1's realtor heard someone else (possibly Company #2) put in a cash offer for the property, and so they want everything done NOW NOW NOW.

          BM said if this sort of thing keeps happening, where they don't let him make commercial lending decisions, he's just going to send applications down to the main branch and let them make the decisions.
          "I look at the stars. It's a clear night and the Milky Way seems so near. That's where I'll be going soon. "We are all star stuff." I suddenly remember Delenn's line from Joe's script. Not a bad prospect. I am not afraid. In the meantime, let me close my eyes and sense the beauty around me. And take that breath under the dark sky full of stars. Breathe in. Breathe out. That's all."
          -Mira Furlan

          Comment


          • #6
            The soup's no good for the peons until *I've* pissed in it!
            I am not an a**hole. I am a hemorrhoid. I irritate a**holes!
            Procrastination: Forward planning to insure there is something to do tomorrow.
            Derails threads faster than a pocket nuke.

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