In commercial real estate brokerage, the gross commission that you earn each year will be critical to the overall income that you generate over time. Look for the trends and pressures in your income.
(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)
Understand your current levels of earnings as they apply to sales and leasing activity. Compare those numbers to the industry averages for your town or city and within your industry, and then identify some real ways to improve commission growth. Commercial real estate success is really all about planning and action implementation. You cannot be complacent as an agent or broker.
Check out the level of competition in your location so that you can understand the people that you will be pitching against when it comes to new listings and client relationships. On average, there will always be a small selection of top agents converting business successfully in your town or city.
Most of the other agents locally will be ‘typically’ average when it comes to business activity. Look at their strengths and weaknesses to see how you can learn the right strategies and skills. Improve your skills and improve your position.
So your target or goal should be to reach the levels of a top agent for your location controlling your own client base and your listing activity.
Exclusive listings are the way to achieve that momentum. Your marketing processes should be considered accordingly so that you are perceived as the property ‘expert’ for the area, and the person that can convert most of the enquiry at the right time. You will need exclusive listings to do that, so refine and improve your listing pitch accordingly. Why should a client list their property with you ‘exclusively’? You must have a good answer that is relevant to your clients.
Costs versus Income
Each year you should be looking for ways to increase your gross income whilst maintaining levels of control on your costs of sale or listing. The costs that you will normally be carrying professionally in your career will typically include:
- car expenses
- telephone expenses
- some personal marketing activities
- computer costs
- Internet related fees
- stationery costs
- desk fees
- franchise costs
Many agents and brokers operate under different business models including those that apply to a franchise situation, an independent operator, and/or a salary based professional as part of a brokerage team. It doesn’t really matter what business model you choose to work to, but it does matter that you are suitably rewarded for the transactions that you create and the commissions that you convert.
The expenses listed above will easily consume a lot of commission before you really get started in your business activities and ‘break-even’ so develop a plan to take yourself forward.
Ways to Grow Your Numbers
Here are some ideas to help you monitor and grow your gross commission numbers in your commercial real estate career:
- THE INCOME FACTS: Look at the listings that you have currently to determine the average level of commission per sales and lease transaction. Smaller transactions are generally a lot of work, and they can consume a lot of your time. Choose the types of listings of suitable size that can help your real estate business thrive and grow over time.
- REPEAT BUSINESS AND REFERRALS: There will be opportunities for referral business after each and every transaction, and with every client and prospect relationship. Ask the referral questions at the right time so that you can grow good client-based relationships with VIP clients.
- YOUR BEST CLIENTS: Understand exactly what VIP client should be to you by profile, location, and property ownership. When you know what a VIP client is, you can target your prospecting within the town or city.
- CLIENT CHALLENGES: Some of your clients will have ongoing property needs. Make sure that you are connecting with them frequently and directly so that you can understand where the next property challenge will evolve. Constant contact will help you build those relationships as an industry professional.
- HONE YOUR PROPERTY FOCUS: Target particular properties that you believe will have a good chance of creating local industry activity and sales and leasing results as the case may be. It can take months if not years to break into a particular client or property ownership structure. Be prepared to make the right connections and grow your business relationships strongly and specifically.
- BUILD YOUR LIST: Your database should be personally established and regularly updated. If you want to thrive as an agent or a broker in your location, then your database will be at the centre of the process. The people that you talk to, your prospects, and your clients will all feature within your database for particular ongoing contact and professional support.
So these ideas are not necessarily new or different, but they are quite specific. If you want to get anywhere in commercial real estate brokerage, then it is the time to look at these issues raised and identify where you can build on your strengths and weaknesses as a top broker for the location.
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