Brokers, Buyers, and Sellers

Why terror? General terror: A broker works on 100% commission, which isn't 100% of the commission paid in a transaction. In a successful transaction, the commission is split between the buying-side and the selling-side brokers. They, in turn, split with their brokerages and often pay referral fees to other brokers. They also must cover the pre-paid overhead incurred in the transaction, like travel, photography, supplemental advertising, and hospitality. So on January 1 of each year, a Broker is like any small business and has no idea what they will earn in the upcoming year. They do know that they will have large expenses for advertising, travel, and other items it takes to run a small business. 

Specific terror: Disappointments are possible in any transaction, buyers missing out on a dream property, or sellers failing to realize a target sale price. A broker by nature is typically a "people person" who enjoys helping others achieve their objectives. So when a client isn't happy, the Broker is really, really not happy. 

Ah, but the bliss! On the other side of the spectrum is the incredible joy a broker feels when his client succeeds in a transaction. Or the days spent touring stunning properties in a truck or side-by-side, having lunch on a tailgate by a creek, enjoying massive views. Maybe it could be experiencing those adventures with some of the most successful and intelligent people in the world today, and learning from them. For me, many times it is simply driving the backroads of Colorado, New Mexico, and Utah, going from one property to another, seeing places daily that many people spend all year saving to visit on their two-week vacation. For this, I feel totally blessed. To paraphrase the lyrics of Ray Wylie Hubbard: "The days my Gratitude is higher than my Expectations, are really good days." 

The number one thing that is valued in any interpersonal relationship is loyalty. The second is honesty. Brokers are bound by license law and industry ethics to these principles, along with a few others. Buyers and Sellers can evaluate how well a broker meets these traits, but Buyers and Sellers are not bound by any such legal obligations. Speaking as a Broker, when a Buyer or Seller is loyal to and honest with us, we will chew off our arm to serve them. I have a 14-year relationship with one client that is based on the trust and loyalty built during the first of multiple ranch transactions together. As is often the case between brokers and clients, this has led to a close friendship. There were multiple opportunities over the years for him to go around me or cut me out of a deal. He never did, and we never had anything more than each other's word to cement that loyalty. In this specific case had we formalized it in a document, I doubt that the bond would be as strong. With the proliferation of online information available to everyone, it is easy for a client to go from Broker to Broker. 

A word about broker-to-broker interactions. 98% of ranch brokers are very ethical and respect each other. We know what 2% to keep watch on. Playing well together is important. After all, we are dependent on each other to realize income. Often, I will call a broker or be called by a broker about a property where we know there is a previous relationship with a client. Even though there is no current written agreement in place with that client, the broker-client relationship is respected. 

A Buyer should expect several things from their Buyer’s Broker. First and foremost, all actions taken by the Broker should be in the interest of the Buyer. This means searching out suitable properties regardless of who the listing Broker might be or what the commission structure might be. 

The Broker should use their expertise to point out potential or existing pitfalls of which they are aware, or discover during conversations and research into a particular property or area. New ranch Buyers don't always know what questions to ask; the Broker should. This requires the Broker to learn the properties he is going to show if he is not already familiar with them. 

The Buyer must expect that the Broker will be honest about the extent of what he knows. Making up answers or guessing about facts is not acceptable. Your broker also needs to point out what they believe to be embellishments or misleading statements made by listing brokers or their marketing materials. I am wary of brokers who say you will shoot a certain B&C size bull elk or mule deer buck on a specific property. Research in the area is the best way to get a feel for that. 

The Buyer must expect confidentiality about motivation and maximum purchase price during negotiations unless he authorizes the Broker to disclose either. Contract negotiations require a strategic agreement between Buyer and Broker. The Broker takes direction from the Buyer and works to achieve the desired result. 

The Buyer must expect the Broker to protect their earnest money through clear and timely communication of contract deadlines. The Brokers I know are very diligent about not allowing earnest money exposure unless the Buyer approves it. We consider this to be a top priority. The title company, my personal assistant, and transaction coordinator all backstop the contract deadline date table so the Buyer is kept aware. 

The Buyer should expect that any transaction will be handled professionally by the Broker and his team. I have a transaction coordinator and personal assistant; very often, an attorney or business advisor will be involved on behalf of the Buyer. The Broker coordinates the interaction of all participants, including the title company and the Seller's side. 

The Buyer should expect their Broker to arrange all showings and interactions with the listing Broker. This also includes schedules and logistical recommendations to the Buyer. As frequent travelers of the areas where we sell, we will know the best places to stay, restaurants to eat at, and other local highlights. My wife claims that I know the best cinnamon roll in every town in Colorado and New Mexico... she's right. Knowing local details can make a Buyer's ranch search much more enjoyable and also introduce them to the communities they may soon live in. 

It is simple: a Broker expects honesty, loyalty, and respect for their time and effort from the Buyer. A Broker only gets paid when a deal closes, so time is their currency. We deal with high-value properties that require advanced planning to view. This requires the schedule coordination of two brokers, a buyer, and the availability of the subject properties. Typically, a Buyer will want to view several properties on each trip. This usually involves multiple days, as a ranch tour will typically be a four-hour event, and there can be several hours of travel time between ranches. We can do heli-tours to cut time, but the feel of a ranch can only be understood completely from ground level, and that takes time. Because the Seller is offering a high-value property and there is a huge investment in scheduling and travel, proof of funds from the Buyer is a standard upfront requirement before scheduling a ranch tour. There are exceptions, like clients well known to the public, or known to both brokers, or Buyers who have a known history of ranch purchases with the two Brokers. Still, there are some Sellers who will make no exceptions and will want to see the proof of funds before allowing a Buyer on the property. 

This is the time to bring up a weird phenomenon that most Brokers experience almost weekly. Collectively, we don't have a rational explanation for it because it doesn't seem rational. That is the Fake Buyer. There is a large group of delusional people who will time-suck hours of a Broker's time inquiring about properties and claiming to be qualified to buy properties, all the way up to scheduling tours. They come in a variety of flavors, the Boaster being a common one. The Boaster wants to buy anything and everything and doesn't care about price because he is loaded. The one thing they all have in common is that they cannot provide proof of funds. There is always a story or attitude: indignation, or the anticipation of a vague upcoming revenue event, etc. It can be tricky for the Broker because often there is a legitimate future revenue event for some Buyers, like the sale of a company. In those cases, more research and background provided by the legitimate Buyer will usually confirm his story. Half of the time, the Fake Buyer will evaporate when pressed for Proof of Funds. The rest of the time, they try to hang on with explanations about why proof isn't available or a crazy story about how they are going to get the funds. A couple of my favorites: the guy who was convinced that the 10 million Iraqi Dinars that he bought on the internet for a thousand dollars were going to be worth $10 million USD once the dinar was revalued to equal one USD.  Or the family who wanted a specific ranch and was determined that if he manifested that desire, the universe would somehow provide it to him. The truth is that every Broker has wasted hours and hours of their time on these people, even if they won't admit it. The one thing a legitimate Buyer will always do is provide proof of funds as soon as possible, because that is what they would do if they were selling a high-value property.

The Seller is hiring a Seller’s Broker to market his property and navigate the sales process. The expectation is that the marketing will be professional and will accurately portray the property and its attributes, with professional photography and marketing materials. Distribution of the marketing package through a variety of channels is also critical. Today, there are conventional channels and emerging channels. Print ads still play a role, but the internet is the meat of any advertising plan. Online search is evolving. Once, Google-type searches were the standard, and marketing departments and brokers spent a lot of time tailoring the marketing package to match the most effective search algorithms. Now, in addition to that, AI search is a huge consideration. AI scrapes the information on the internet to provide results. In essence, it is aggregating all Google search info into a single response. Social media is an important marketing tool, and it consists of several platforms. So, a Seller must expect their Broker to understand and utilize these channels to market their property. 

When pricing the property, the Seller should expect an honest pricing opinion from the Broker, whether they like what they hear or not. 

The Seller should expect their Broker to qualify potential Buyers before a tour of the ranch is scheduled. This means querying the Buyer's Broker about their client and requiring proper proof of funds. The Seller should expect their Broker to handle all communications with the Buyer and Buyer's Broker and not involve them in those interactions unless by mutual agreement. 

The Seller should expect the Broker to provide confidentiality before and during negotiations. This means not revealing motivation or the lowest price acceptable to the Seller unless told to do so. 

The Broker expects the Seller to tell them everything material about the property that could affect value positively or negatively. Likening it to a lawyer defending a client who withholds important information. A Seller's Broker hates to be the last to learn something about their listing. If a Seller wants the best performance from their Broker, they need to tell them everything about the property. 

A realistic evaluation of the property and current market conditions is what Brokers do, and a Broker expects their Seller to strongly consider their input on this. The most frequently asked question to a Broker is: How is the ranch market now? The answer is, it is always good if the price reflects the current market balance of Buyers versus Sellers. There will be Buyers at the right price. That price is influenced by the current market.

A Broker expects easy communication with the Seller. During the process, frequently, time is of the essence, and prompt responses are required. The Broker will do anything legal the Seller directs him to do, but he needs to know what that is, often before a critical deadline. A Broker's worst conundrum is a Seller who ignores deadlines, withholds critical information, and is generally non-cooperative in the relationship. 

A good Broker will have at least a working knowledge or sometimes an expertise in hunting, mineral rights, income opportunities, water rights, conservation easements, ecosystems/climate, seasonality of access, and local regulations and idiosyncrasies. They will also be a real estate professional who is well-versed in all aspects of the requirements needed to complete a transaction in the appropriate jurisdiction. They will also have a pulse on market conditions, locally and regionally. 

A good Buyer will be loyal to one Broker at a time, honest about their financial capabilities, and the properties they can afford. They will also communicate well and consider the advice and warnings the Broker provides. They will follow through on schedules as is feasible for them to do. 

A good Seller will be forthcoming about knowledge of their property and keep the Broker well-informed about changes to the property during the process. They will also communicate well and consider the Broker's advice regarding pricing, offers, and marketing. They will have the property as "show-ready" as possible, making recommended repairs and improvements to make the property as attractive as possible. 

A Broker/Client relationship often is the beginning of a long friendship. Both are working together toward a common goal. The Broker is privileged to be working for and learning from incredibly bright people. If the client listens well, they will learn about the best cinnamon rolls, breakfast diners, and secret fishing spots in the state from the well-traveled Broker. The symbiotic relationship between Client and Broker should be beneficial to both when each meets the other's expectations.