Now this is likely to upset some salespeople but the process is worthwhile visiting. This is an article from our recent Commercial Real Estate Newsletter for Agents.
It’s a fact; in commercial real estate it is really hard to find good salespeople that consistently drive their own market share and do the deals. The factor is likely to be 80/20 between ordinary salespeople and the other good ones. Of the good 20% it is the case that only half of them are really at the top end of their market with dominant market share. The numbers are a reality check for those that want to enter the industry.
Yes, there is plenty of opportunity around for people to tap into, but it takes hard work and consistent effort to be really good. In any property market you have to work to a plan and a personal system. Those that do can tap into the right people when the right property comes along. Does that mean that you should not enter the industry and start your sales career? No is the simple answer, you must however be prepared to put in the effort to build your business, because the principal or boss of the office is only a small part of the equation.
Here are some tips for principals in looking for salespeople to work in commercial real estate:
- Ask for proof that the person is really as good as they claim. Get specific figures on listings and commissions, and ask them about marketing strategies that they would use themselves in the current property market.
- Beware of the agent or salesperson that is full of ego. They are likely to be ‘dreaming’ when it comes to the reality of what they do and what their market share is. Drill down on all the facts that they provide.
- Get a character analysis done of the selected salesperson by a qualified human resources group. They would likely have a number of models to use and they are all reflective of the traits that the person displays or hides in the interview process.
- Remember that you want a salesperson that can sell and list. You want a person that really knows how to build their market share with good clients, and then follow through with ongoing networking.
- Be careful with the commission structures that you strike with top performers; whilst they may demand 60% or more of the commission in the deal, this will put your business into the grey zone when it comes to costs. They should only be paid the 60% when they reach the performance level each year. This puts the onus on them to improve and perform.
- Watch out for the question about who owns the database of people that they create as part of their job. The database is your property as principal. You want them to maintain the database and leave it behind when they go. Whatever you decide to do here will need to be reflected in a contract of employment that complies with your local laws on labour and employment. When in doubt seek experts to help you.
- Give each of your salespeople a mobile phone so when they leave and move to another business, they are leaving the mobile phone with you and allowing you to continue the relationships with their clients.
- Local property knowledge and the intelligence to transact commercial real estate correctly are really important factors to keep you as the agent principal out of trouble. Dangerous, negligent, and poorly performing salespeople have no place in the industry. Your professional indemnity insurance does not have to be put through the pressure of difficult and underperforming staff.
So the message here is that the managers and principals of real estate offices should be very careful in employing salespeople. Make sure you are using the appropriate probation periods to check out any new staff that you employ. When in any doubt regards a salesperson it pays to act earlier rather than later; tolerating underperformers can be a costly experience.
You can get more ideas about commercial real estate employment and practices at our main website http://www.commercial-realestate-training.com/