Unleash the Dogs

Unleash the Dogs

By David R. Corder

Associate Editor

Sunlight just breached the horizon a when a chartered helicopter landed in a clearing at the edge of a rural Pasco County forest. Over the next several hours, representatives from about two-dozen of the region's most prolific homebuilders arrived for invitation-only aerial tours over a potentially lucrative 450-acre development site.

On the ground, Tampa land broker Bill Eshenbaugh greeted the visitors in the cool October morning with hot coffee and donuts under the shade of a temporary canopy. He orchestrated the aerial tours as part of a marketing strategy that he calls, "Unleashing the Dogs." It's a new twist to the more traditional real estate auction.

Each of the prospective buyers signed an oath of secrecy in exchange for the chance to submit sealed bids on the lake-laden Pasco property. The property owner will decide later whether to accept the best offer from the most qualified buyer.

This is a sales strategy Eshenbaugh – who markets himself as The Dirt Dog – uses to gain a competitive edge in the Gulf Coast's increasingly crowed real estate market. It's not just the competition this colorful broker faces from other land brokers, both experienced and an increasing number of inexperienced ones.

In addition, investor flight from the stock market to more secure real estate investments over the past several years has emboldened owners of large tracts of land. Many of them question whether they even need a broker to sell highly prized Florida land that seems to appreciate by double digits and frequently elicits multiple unsolicited purchase offers.

"We've found more recently that property owners were less likely to list a property with an agency," Eshenbaugh says. "They were more tempted to sell it themselves because they got inquires from a lot people - prospective buyers and brokers looking for a listing. However, those brokers may or may not be as qualified."

Members of Ruskin's family-owned Spencer Farms Inc. posed the tough question to Eshenbaugh earlier this year when he proposed a contract to sell a small portion of the family's real estate holdings in southeast Hillsborough County.

"As part of the discussion they asked me: 'Why do we even need to hire someone when we're getting so many inquiries?" Eshenbaugh recalls. "My answer was my 25 years experience. I asked: 'Do you think I can get you 10% more than what anybody else offers? Or can you sort out the real players from what I call the faux players?' "

The family gambled on Eshenbaugh's marketing strategy and won. "We ended up getting them 15% more," he says. "That's proof that it works."

Members of the Spencer family think it's proof enough as well, says Jeff Hills, president of the Tampa engineering firm Hills & Associates Inc. His firm advises the family on land use entitlement issues.

"Was there added value by submitting it to the market to bid like Bill did? Yes," Hills says. "What he did was set a minimum suggested bid price. From there the family waited to see how the numbers came in. The family was happy with the numbers that came in."

The family members plan to reward Eshenbaugh with more than just the commission he earned on the sale of the 110 acres, Hills says.

"They're currently in the process of entitling phase two, which will be marketed sometime in the middle of next year," he says. "They will use Bill again to market phase two."

Sealed bids

There are other commercial brokers in the market that use some form of the sealed bid process, says Dennis Bush, a commercial broker in the Tampa office of Colliers Arnold Commercial Real Estate Services. Bush, however, is not one of them.

Bush, a former developer turned broker, tends to rely on the more traditional broker-seller relationship.

The difference between these two brokers appears to center more on economies of scale than anything else. Eshenbaugh, as president of Eshenbaugh Land Co., is an independent broker with a small staff. On the other hand, Bush has access to considerably larger corporate network.

They each share a common problem, however.

"What poses a challenge for me is some of the values set on these properties," Bush says.

Sometimes it's difficult to convince a property owner his land lacks the value of a neighboring property that may have recently sold for a high price, Bush says. This is particularly true for properties that have higher density land use entitlements, which sometimes take up to 18 months to earn from county planners and are expensive to acquire in terms of engineering and legal fees.

That was the strategy the Spencer family adopted.

"The family intentionally started the entitlement process prior to marketing it," Hills says. "We did that to avoid that typical 12- to 18-month closing time frame."

Meanwhile, Eshenbaugh recently opened the sealed bids from several homebuilders interested in an 854-acre site in Manatee County. He orchestrated a similar marketing strategy there. The owner has not yet made a decision on whether to accept an offer.

"We just went through the process and ended up with several offers at the minimum bid price and some under," he says. "Two were significantly over it but with conditions."

Such indicators tell Eshenbaugh the marketing strategy works.

"You've got to separate yourself from the competition," says Eshenbaugh, who earned national recognition in 2003 as Land Realtor of America from the Realtors Land Institute.

"You want to be on the leading edge," he says. "There's an old saying about sled dogs: 'If you're not the lead dog, the view never changes.' "