Handling Objections in Commercial Real Estate Sales or Leasing

Objections in the negotiation of commercial or retail property sales or leasing are common place. Everyone will object to something; everyone has to have a win of some type or other. This is where the negotiation skill of the agent or salesperson has significant bearing on the outcome of the transaction.

Whether it is in the price, the rent, or the terms and conditions of the deal, the objections will occur. Real estate agents have to handle the objection and do so very well; confidence and competence are the keys to how you progress the negotiation. Practice and skill is needed to consistently convert and close the transaction.

Now you will not close every deal for the simple reason that some demands are just too excessive or unreasonable. You should however have a base plan for working with and through objections when they occur. Here is one form of ‘objection control’ that may help you.

  1. In the first instance, you should hear them out to see what their opinion and demands are. This also gives you time to think through the various alternatives of response. Encourage the client or the prospect to completely explain their position.
  2. From stage one above you can then paraphrase their position and opinions back to them. This essentially means that you restate their opinion in your words. It helps them to understand and see that you are completely on track with where they are coming from. It also shows your respect for what they’re saying.
  3. From stage 2 above, you can then the question the facts and details of their position. The more questions you ask the better. Drill down and get them to talk about any matters of concern or urgency. It is quite likely that the answers provided will give you an advantage in response.
  4. Given that you now fully understand their points of negotiation, you can give your opinion or position subject to the instructions of the client. It could be that the rent or the price on the property is under negotiation and offer. Having third party information and price or rent comparable evidence from other local properties will help you with the points of discussion.
  5. Subject to the depth of the issue and points of negotiation, you can seek time to consult with the client for their instructions. Sometimes this activity is more strategic than necessary, however it does give you the time to reposition your thoughts and alternative counter offers.
  6. After careful consideration of the matter under negotiation, you can give a distinct and simple answer. Negotiation should always be a simple process. If many points are being negotiated, it pays to have a list process to simplify the counter offer. Work on the easiest things first to get some form of agreement between the parties; the harder and more detailed parts can be handled towards the end of the negotiation after small agreements have been reached.
  7. Every offer and counter offer should be put in writing. This gives some form to the negotiation and allows people to sign off on the matters under discussion. If the transaction is very complex, then some form of heads of agreement will simplify the offer and counter offer process. When the key elements of the transaction have been agreed, you can then bring in a solicitor to document the total contract of sale or lease of property.

You can get more ideas and tips for commercial real estate agents at our website http://www.commercial-realestate-training.com/

Third Party Confirmations in Commercial Property Sales

As the local real estate agent it is quite common when you are selling commercial property, to get to a point where the seller will not negotiate down on price, or accept that the value of their property is less than what they want. More often than not, they will then tell you to get an offer before they will talk about reducing the price. You know that offers will not come in until the price has been reduced significantly.

Do Not Advertise

A property that is well away from market price should not be advertised in this market, as the first few weeks of marketing at the high price will kill ongoing enquiry.

This is where experience and negotiation skills of the agent become quite important. The reality of the situation is that the offers do not come in to you because the property is priced well above the market; you know that the only way to get an offer or even interest from anyone is to get the asking price of the property down.

Where are the Buyers?

There are buyers out there waiting for the right property at the right price. When you are marketing a property, a higher price will kill any enquiry, it’s that simple. We are not working with the 10 buyers on one property that we had 4 years ago; more often than not today we are seeing only 1 or 2 buyers for each property. Only a few buyers can act in this market, and that is why we must work with what we have.

In this tougher property market, the buyers are more selective and the ‘heat’ of the market has gone. On that basis we are negotiating with fewer buyers and the buyers are less inclined to negotiate until they are ready. Property negotiations today are slower and tougher. The agent will more often than not have negotiation challenges with the seller and the buyer.

Third Party Proof

The only way to handle sellers and buyers that are reluctant to move on their asking figure or offer is to use a third party authority or proof on the price. You have to get evidence of the reduced prices in the market and then use the evidence in the negotiations.

Third party evidence is not fabricated, and it is the ‘real deal’ when it comes to shifts in prices. It is the comparable evidence of other property sales in the local area. It shows your seller that things have changed.

It will take you more time to get the price ‘evidence’ but it is worth it, and will support your case for a more realistic price on the listing. It will help you close the deal.

If you want more tips for commercial real estate sales and leasing in this market, visit our website at http://www.commercial-realestate-training.com/

Evaluate Your Local Area Marketing

When you work as a real estate agent in commercial real estate it is important that you implement and monitor your local area marketing campaigns. Commercial real estate is a property type that is centred on the sentiment and activity of the local business community. Your local area marketing should be centred on three parts of the local property market. That is:

  • Property Investors
  • Business Proprietors and Tenants
  • Property Developers

Each year you should set aside funds for local area marketing. That is the marketing of the individual salespeople and also the real estate office. The marketing tools available for your promotional purposes should be systemised within the groupings that work locally. They will usually be:

  1. Signboards on properties available for sale or lease
  2. Internet Advertising on your website
  3. Internet Advertising on generic industry based websites
  4. Success letters to the local property owners and businesses
  5. E-mail marketing through specific newsletters
  6. Hard copy brochures and flyers specific to the property type or the individual property
  7. Direct mail to the local property owners
  8. Direct mail to the local business community
  9. Just listed letters to the adjacent and nearby property owners
  10. Referral business through previous contacts
  11. Established relationships with the older transaction clients
  12. Database pipeline regular contact
  13. Cold call prospecting in your local area
  14. Canvassing of the local streets relative to the commercial property zone

So these are all marketing tools to be used by the salesperson or real estate office. Any enquiries generated should be tracked to the particular originating point of contact. In that way you will know the marketing tools that work more effectively for you.

Today there is a tendency to take the easy road when it comes to property marketing. Electronic Systems of contact such as e-mail, email newsletters, and Internet Marketing are convenient for the salesperson to use, but they should not replace the traditional advantages of personal contact and physical meetings.

In simple terms, tracking your marketing activities will allow you to understand the processes that really do work when it comes to attracting enquiry. Each and every enquiry should be entered into the property enquiry database for regular ongoing contact given the desired property type or attributes needed. An up to date database is of high value to your real estate business and commissions.

When you evaluate your marketing you can make better decisions when it comes to attracting property enquiry for your clients. The agent with the best local database will be of high relevance to the property owners needing help with a property challenge. Use your database and your marketing tracking activities as points of difference in selling your listing proposals.

You can get more tips for commercial real estate agents at our website http://www.commercial-realestate-training.com/

When Things Get Tough the Tough Get Going

In this commercial property market, as an agent you have to be tough and you have to think tough. No advantage is gained by looking at the negatives and sitting back mooching around in the office. Far too many agents and salespeople support each other with excuses and obstacles when they can’t convert the listings or the deals.

The best way to handle an industry slowdown or market change is to prospect and cold call a lot more.

Double your prospecting starting right now; when you talk to more people and capture the enquiry into your database things start to move. Action beats every obstacle you come across. Give me a salesperson that takes action and I will show you a success to be tapped.

In a commercial real estate clients office that I have something to do with, they are consistently pulling in 30 deals a month between 7 sales people and that is in a slower market. What does this say? Get active and the results will come in. Keep pushing ahead; that’s the rule.

Speak to more tenants, talk to more landlords, find some business leaders to talk to; they all like to talk property in one form or another. Some of them will need help. You are the ideal agent to help them.

Check out my website if you want some more ideas from the ‘Commercial Coach’. Go here http://www.commercial-realestate-training.com/

What Does a Commercial Property Salesperson Do Over Christmas?

It’s an interesting question to pose. What does a commercial salesperson do over the Christmas break? Most of the guys I know take off somewhere to get away from the office. They say or think that the market is slower in January and hence they will not hang around. My experience however says that there is a lot of business out there in the market to be captured and a good time to do that is in January before others come back into the office.

The fact is that January is a great month to make the calls and meet the people. Most property investors or business owners are thinking about what they will do with their property or tenants in the coming year; isn’t that a great time to be out there talking to people? I think it is.

If you want some more ideas about being a great commercial salesperson in your market, check out my website at http://www.commercial-realestate-training.com/

Push Yourself to Build Your Commercial Real Estate Business

In this market and economy, the real estate agents that are the most successful are the ones that push themselves to do the hard things every day. Progress and market share today are not random things; they only come from definite action to a real personal plan. There are good listings out there to lease and sell; it just comes down to how much work you put in as part of the prospecting and pitching process.

Here are my experiences on a plan of action to take in a tougher real estate market:

  1. Prospect by cold calling every day to new and established contacts for at least 3 hours
  2. Run a database program to capture your enquiries (a simple program is just fine)
  3. Get in front of 2 new people every day from your prospecting calls
  4. Make 40 to 50 prospecting calls per day
  5. Keep in contact with your prospects and clients on at least once every 90 days (or more frequent)
  6. Practice your dialogue for presenting and negotiating
  7. Get your business card and face in front of many people in an ongoing way

If you follow these things and tips, you will generate more leads for listing and conversion to deals. Work hard and the business will come.

You can get more commercial real estate tips for agents at http://www.commercial-realestate-training.com/

Property Listings are an Absolute Must Have

In this property market, the number of new listings that you generate for your commercial real estate agency business will help you create better sale or leasing conversions and the resulting commissions. The established fact today is that not every property will sell easily in this market. Only the best properties with the best improvements and tenancy mix will create good enquiry. The enquiry that you generate from each and every listing and signboard should go into your database for future ongoing contact.

Recently I caught up with a number of salespeople in Sydney Australia at a workshop. There were some 30 or 40 salespeople in the room. During the early parts of the workshop, I started to talk about database and how the database should be used in commercial real estate agency. Only one salesperson in the room could prove to me that they had a significant personal database of substance and accuracy. Without a doubt, that salesperson was more successful than anyone else at the workshop. That salesperson was telling me quite clearly that they were living off the activities within their database. Every day they confirmed that they would make the calls and contact the people that they had spoken to before. They were also contacting new people on a daily basis to qualify them for entrance into the database.

The process of database creation and contact is so simple and yet rarely implemented correctly. Here are a few tips for those salespeople wanting to rise to the top of their market:

  • You will need at least 2 hours a day to make cold calls to new prospects within your market
  • You must follow up on all the prospects that you have spoken to previously on a 90 day or less frequency
  • The key objective of prospecting today is to get in front of enough people that have a serious property need at some time in the future
  • Personal contact remains the most powerful way of converting new business
  • Get at least 2 meetings a day from your call contact system
  • The best real estate salespeople market themselves each and every day

So many times I have heard a salesperson saying that they do not have a good database because the principal or manager of the office will not buy the software. The reality is that you do not need to spend many dollars at all in creating a new database. Excuses are counterproductive; action is the only thing that matters in commercial real estate. At the very basic end of database activity you can use the simple contact records in your diary software program. The key to the success of database usage is in the personal frequency and diligence of the process.

If you need any more tips for commercial real estate agents you can get them here at http://www.commercial-realestate-training.com/