S.E.C. Real Estate Observer

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Moderators, by definition, are those who preside over an assembly, meeting, or discussion. In the context of our marketing session framework, a Moderator is a communication facilitator or conduit acting in the capacity of a catalyst and transaction merchant. Pursuant to these definitions are various responsibilities and functions that are implied when one accepts the role of moderating. Among these functions and responsibilities are:

1. Gathering information
2. Clarifying ambiguities
3. Channeling the presentation to a productive and logical conclusion
4. Stimulating the participants to think and act

Woven through the fabric of responsibilities to a properly moderated presentation is awareness by the oderator of how value is created.

Let’s first understand that price does not create value! Price is object related, and merely a simple way of keeping score. Price is specific and precise, albeit changeable, and fixes, for a moment in time, that which is asked or paid to divest one’s interest or ownership. Then, what does create value? Value is created through benefits.

Whereas price relates to objects, benefits relate to people. Benefits are the components of value. These components can be something that promotes well-being or fulfills a need.

In other words, benefits can be seen as providing pride, pleasure, or profit, and in some instances a sense of relief. Each perceived benefit involves an individualized interpretation of two presentation basics, the property and the ownership. Specific facts, features, amenities, opportunities and potential for profit related to the property are primary aspects of establishing value for someone. The second involves the contribution and/or participation the client is prepare to make toward a transaction. This can be witnessed through the client’s skills, talents, property ownership experience, expertise, capabilities and other property assets the client is prepared, and/or capable of contributing to the transaction.

More importantly, and perhaps foremost, is to determine what the client is prepared to do for the listening audience! Listed below are examples of client participation:

1. Discount and buy back
2. Lease back
3. Lend back
4. Joint venture forfeiting cash flow
5. Partition the cash flow and provide a high rate of return
6. Joint venture providing a safety first position
7. Take a low interest carry back note
8. Make a geographical move (relocate)
9. Take on negative cash flow
10. Use financial strength
11. Accept personal property
12. Move the debt
13. Provide management
14. Take property in any location
15. Remain responsible for the existing debt
16. Remain responsible for the payments
17. Obtain the entitlements to the property
18. Mitigate wetlands or other environmental restraints on the property
19. Pay all closing costs
20. Add cash (amount)
21. Other!

One becomes a TAKER when they combine, in whatever configuration that is satisfactory to them, the benefits they interpret from the property and ownership segments. For this reason, there is a precise method to follow when moderating a presentation. Basically, it is following the: why, what, where and how format.

1. Why should I own the property? (Benefits)
2. What will the owner contribute to the transaction? (Benefits)
3. Where is the motivation?
4. How does the TAKER structure the transaction and/or what solutions are available?

The first two are non-judgmental and allow for a clear, concise review of the BENEFITS available. The later two involve judgment and structure.

Part II will appear in the next issue of the S.E.C. Observer.