Many of you have used brokers when you buy or sell outdoor advertising assets. There are many quality brokers with outstanding reputations like Kalil & Co or Johnsen Fretty. There are other outdoor advertising brokers who operate unethically. Here are four ways that shady brokers try to cheat you.
They get in the middle of a transaction and mark up the assets which they sell to you. Take a look at this pending case from Texas in which MH Outdoor alleges that Curtis Brooks, Jim Richardson, Richardson Outdoor Advertising and Action Display, Inc. conspired to sell assets to MH Outdoor at inflated prices and that $1.75 million in kickbacks were received by Brooks while he was contracting to acquire assets on MH Outdoor’s behalf.
- They pretend they have an asset for sale when they don’t. An unscrupulous broker may look for billboards which are listed for sale at outdoorbillboard.com, signvalue.com or in Billboard Insider’s classifieds and try to act like they are representing the seller. Insider has a client who was approached by a broker with a less than stellar reputation about buying a sign. Insider asked the client to contact the seller directly to see if the seller had an agreement with the broker. The seller confirmed that the sign was for sale but there was no broker’s agreement and the sale price was also less than the broker was representing.
They pretend they have an asset for sale when they don’t. An unscrupulous broker may look for billboards which are listed for sale at outdoorbillboard.com, signvalue.com or in Billboard Insider’s classifieds and try to act like they are representing the seller. Insider has a client who was approached by a broker with a less than stellar reputation about buying a sign. Insider asked the client to contact the seller directly to see if the seller had an agreement with the broker. The seller confirmed that the sign was for sale but there was no broker’s agreement and the sale price was also less than the broker was representing.- They don’t disclose their fees. Unscrupulous brokers may try to double dip by charging the buyer a fee and the seller a fee and keeping everyone in the dark. A good broker discloses who’s paying.
- They attempt to sell bad locations and bad leases at an outrageous prices to first time buyers. Insider thinks of a sign located mid-block on a secondary road in Florida. The sign was sold by a broker at an inflated price with an inflated lease to a first time buyer along with promises that the site would be great for a digital conversion. The buyer will never get his money back.
On Friday Insider will write about how you can protect yourself from unscrupulous brokers.
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