We were engaged to appraise small retail strip center. On the date of inspection the buyer (and our client), an ebullient young woman with an entourage of friends and family in tow, chattered about “all the possibilities.” We were instructed to discuss the particulars of the property with the seller (a.k.a., not our client) who was also present. Here’s the exchange:
“Hi Mr. Bugiardo. So I understand you are looking to sell the place.”
“Yup.”
“Is it listed for sale?”
“It’s for sale,” he assured.
“Do you have a broker? An asking price? A contract of sale?”
“No.”
“Um, o.k., Can you tell me about your tenants and their leases?”
“Don’t have any signed leases. The car guy pays me $2,300, the nail lady pays me $1,800. They cover the mortgage.”
“How big are their spaces?”
[Shrugs] “I dunno.”
[Audible Sigh]. “So what are the expenses? Taxes? Insurance? Repairs?”
“They are, you know, not so big.”
“Do you have any documentation? QuickBooks, income tax returns?”
“Not really. I kinda keep track in my head.”
“I see. You bought the building 16 years ago in 1998. Any major repairs or capital improvements since then? Heating and air conditioning? Roof?”
[Smiles] “Now there’s a good thing – we haven’t had to spend a dime on those things.”
“So, to sum up, your property is for sale, but not listed with any broker. You don’t have an asking price or contract. You only the vaguest idea of the property’s income and expenses and you haven’t made any major repairs in 16 years. And you have no documentation to support, well, anything.”
“Yeah, and I need a good number, you know, high.”
“Of course you do.”
– Bob Gagliano
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