“You show me yours, I’ll show you mine.” This is how introductions between confidential winery sellers and interested buyers work. First it begins with the relationship between a buyer and a broker. Then this progressive process carries forward to the buyer and a seller.
What I’m referring to is information and verification. No broker worth their salt would cough up their proprietary knowledge of wine related real estate opportunities (i.e. lifestyle winery estates, vineyard estates, vineyards or wineries) to a buyer without vetting who they are, if they have loyalty and respect for the buyer/broker relationship, and where the buyer’s money is.
The ‘show me yours’ process is the foundation Wineryx's success. Buyers who contact WineryX with an interest in acquiring a winery/vineyard should be prepared to do two things: complete a BUYER PROFILE, and sign an agency disclosure. Without these, the sharing of information cannot proceed, and doors to opportunities cannot be opened.
A Buyer Profile is basic information that vets the buyer’s interest, focus and financial capacity.
An Agency Agreement is simply an acknowledgment that the Buyer understands how the agency relationship between a buyer and a broker works. It creates a clear foundation of expectations to prevent future misunderstandings regarding the buyer's authority for representation.
Once a Buyer Profile is received and reviewed, a discussion is opened with the Buyer regarding any conflict of representation, history of what they’ve looked at, what they liked and didn’t like and why and where they want to go from here.
The more information provided on a Buyer Profile the better the chances of opening doors on the best winery/vineyard offerings, and making time-saving matches.
Upon establishing a trusting, win/win relationship between the buyer and the broker, the broker is then willing to leverage their reputation, their connections and knowledge on the buyer’s behalf to make introductions to real estate opportunities that could suit the buyer’s needs within their target investment range.
The strategic introductions are often limited to one or two introductions at a time. Why? Because: The method of target matchmaking works best for real buyers, real sellers and trusted real estate brokers.
Some buyers (particularly those who are new to this real estate niche) expect an inventory of opportunities to be laid out for them so they can educate themselves and decide what to look at. In an ideal world, yes, this would be grand. However, we are not dealing with sellers of houses and warehouses who want the whole world to know they are for sale to help them achieve the best market value.
Winery sellers want the best price they can get too, but they often don’t have the luxury of full market exposure due to high risk factors such as potentially losing key employees, losing distribution, winemakers and even loyal customers. Being ‘for sale’ is not an ideal status of any wine branding plan. And so you have the reason for the next reciprocating ‘show me yours’ exchange between buyer and seller.
Unlike residential or commercial real estate where a broker can provide a wide range of comparable active and sold properties to a buyer for education purposes, this is seldom the case with winery properties, though the trend of winery and vineyard estates being offered on the MLS changed in the last 5 to 7 years (due to the softening of the economy and the supply/demand factor). Still many of the best Napa Valley lifestyle/boutique/cult winery and vineyard estate properties that are for sale at any given time are marketed discreetly among a small group of brokers, consultants, M&A firms and attorneys.
Based on a buyer’s stated acquisition goals the broker will provide a generalized, non-confidential overview on the opportunity including size, region, assets and price. Based on this overview the Buyer decides if they want to pursue and learn more. The Buyer’s Profile is shared with the Seller and/or agent, and the Seller ultimately authorizes WineryX to make an introduction after a mutual NDA is signed between the parties.
The Buyer is then provided with the full offering memorandum (usually minus detailed financials, which are provided in the due diligence stage) that reveals the name and details of the offering. Based on the Buyer’s review of the memorandum a site visit is arranged, or the Buyer passes and returns the confidential memorandum(this doesn’t happen often since WineryX has thoroughly screened and matched the Buyer with their stated needs and preferences before the introduction is suggested).
A site visit takes place and depending on the success of that, the Buyer elects to execute an offer or Letter of Intent and enters into a due diligence and discovery phase.
If the Buyer passes on the opportunity a new opportunity that meets the Buyer’s stated criteria is presented and the process begins again.
Often the search to acquire a winery/vineyard is an organic process, i.e., the Buyer’s criteria changes through the process of examining opportunities. Good communication is essential to make ongoing matches effective.
Reputation, trust and respect among the brokers, consultants and attorneys who specialize in this niche are the keys to opening doors for Buyers of winery and vineyard estate properties. If a broker gains a reputation for working with tire kickers and time waters, it becomes evident pretty quickly. The more a broker vets you as a buyer the better assured you can be he/she is the real deal and can open the right doors for you.