Re: Experience at using an outside broker [was: ...digest 11/16
From: Fred H Olson (fholsoncohousing.org)
Date: Tue, 14 Dec 2004 06:43:11 -0800 (PST)
Eileen McCourt <emccourt [at] charter.net> is the author of the message below. 
It was posted by Fred the Cohousing-L list manager <fholson [at] cohousing.org> 
after fixing the subject line and deleting excessive quoting.
--------------------  FORWARDED MESSAGE FOLLOWS --------------------

Oak Creek Commons brought in a broker that works with new developments to
close the last 7 or 8 units, and finalize the purchase and sales agreements
on all of the units.  I think it was well worth what they were paid, since
the marketing team was exhausted by then, and there was so much paperwork at
the end.  We were working with Wonderland Hill as our developer; we are in
Calif and they are in Colorado, so it was very helpful to have someone on
site in a sales trailer to meet with prospects and to talk to appraisers and
loan brokers.  

We paid a % on a list of unsold units; already sold units were half the % to
close, and units that were in play (strongly interested prospects already
engaged) were counted as sold, if that particular prospect closed.  We
closed four units the first weekend we had the broker, and for that reason
it would have been easy to second guess our decision, but in the long run,
it was well worth the approx 75K that we paid to sell 8-10 homes and close
on 31 condos and 5 lots, plus dealing with turnover.  I think we would have
leveraged the relationship to an even better value had we brought them in
earlier in the process, possibly when we had met the developer requirement
for 70% commitment.  As it turned out, after we partnered with the
developer, we had a hiatus in sales commitments, because we were very busy
then with construction, so it would have been nice to just turn the sales
and marketing budget over to a third party.  We stayed flat at 70% for about
6 or 7 months with coming and going during that period between bringing in
the developer and the sales broker(Paso Robles is a bit of a hard sell
because of the lack of "head of household" jobs in San Luis Obispo County).

The broker relationship did not relieve us from our obligation to host
potlucks, site tours, meetings and events to give prospects the opportunity
to meet the community members and spend time learning about cohousing.  It
just meant we no longer had to produce direct mail campaigns, manage the
advertising budget, and be the first person to take inquiries.  We still had
a member follow up on all warm leads.

As a member of the marketing, finance and project management teams, I was
very satisfied with the outcome of working with a broker who specializes in
selling new construction.

Eileen McCourt
Oak Creek Commons Cohousing
Paso Robles, CA  93446

 





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