Classic bad advice at a broker conference

Spent most of the day yesterday at the annual Marcus & Millichap LA apartment conference.

As part of an on-stage interview, one broker (I won’t say which one) was asked what he sees happening over the next year. He went into a whole rap about how “it’s a good time to sell, there is capital moving around from asset class to asset class, blah blah blah.”

I obviously started snickering and people were staring at me.

It’s hard to imagine a clearer example of a guy talking his own book than a broker, who only gets paid when investors transact, suggesting that it’s a great time to sell.

For the record: Every time to you sell a property, an enormous amount of value is destroyed… you pay brokerage commissions, escrow fees, title insurance, loan brokerage fees, city and county transfer taxes. And, valuable Prop 13 property tax basis is destroyed (in other words, the property is literally worth more to you than to the buyer, because his property taxes will be higher than yours are).

You know when is a good time to sell? Ideally never, and certainly as rarely as possible.