In the commercial real estate industry, you will get plenty of pressure from your clients and prospects to reduce your commission or service fee. If you truly believe that your services are superior in your location and with your property types, then fee reduction is not an option.
Ask for the appropriate fee for services to be rendered. Talk about the value that you provide to the client and their property challenge, and then wait for an answer. Be prepared to walk away from a fee reduction request if it is unfair or too onerous.
Desperation is not a good look in commercial real estate nor should it be the basis of your commission or listing agreements. If you truly believe that you are offering a top-quality service, then ask for the fair fee, and stick to your request.
One thing should be remembered here when thinking about listing fees and commissions. The client needs your services to resolve their property challenge to get the best outcome achievable and to do so in a timely way. If you sell your services through those two points of focus, the conversion of the listing at a fair commission is quite achievable.
Who Do You Work For?
You do not want to work for clients that are unrealistic, or not aligned to the property market situation today. Local area investigations will show you and the client what the chances may be of getting property enquiry and inspections underway.
So, a focused listing approach and presentation process will help you achieve better outcomes with your clients and with your service commissions. Try these ideas for starters:
Show that you understand the facts. That then is those facts relating to the client and their property and its position in the location. Inspect the property with the client to discuss presentational issues, strategies, improvements, and tactics.
Define a clear target market. Every property will be suited to certain target markets. The more direct that you are in defining that fact will then help with client engagement and decision making.
Tell a few stories. Property stories always help with a client conversation and decisions required. Choose the stories that are best suited to the property type and the challenges faced by the client in today’s terms. Show that client that you understand the solutions required. Talk about how you will direct your efforts towards solutions.
Choose the best method of sale (or lease). There are different ways to approach the marketing of any property. Make your choices for the client and give them some alternatives to work with. It is then easier for the client to decide what they are doing and why they should act in a way as part of moving on your recommendations.
Give real strategy to your professional approach. Don’t be generic in your business approach to listing or selling a commercial property. The ‘common’ approach to marketing and negotiation should only apply to ‘open listings’.
Give timelines to the campaign and marketing process. There are many things to do in marketing a commercial, industrial, or retail property. Show the clients the stages of your approach and how they are so relevant to moving things forward. Put yourself in the equation of property marketing and negotiating.
Seek exclusivity for work to be undertaken, as that is the only way you can devote the required time to the client and their property. Show the client why your exclusive listing processes are superior in resolving their challenge today.
If you follow these rules, it helps you convert listings and achieve better commissions. Always document the sale or lease agreement comprehensively and legally, so you do not have to revisit the commission discussion again. Simply put, get into the marketing of the property and resolving the client’s property targets and obstacles in a timely way.
The best agents in commercial real estate know how to communicate effectively and control their transactions from start to finish. They do not lose control of the deal momentum. They stay with their listings and negotiation positions to the very end. Those focus points are quite important.
Things will change, and momentum will shift in any sale or lease, so expect that. Understanding the momentum of the parties and their negotiation targets will help you effectively convert and control the transaction. Set your rules to all the communication processes across listings, inspections, and negotiations.
Comprehensive Communication with Listing Control
Stay with the transaction and the involved people from the very beginning.
Here are some ideas to help with that transaction control:
Know who your client is in the transaction, and don’t lose that awareness as the elements of the deal move and change. The client is the person that needs your help and will be the one that is paying the commission at the point of success.
Make sure your appointment to act in the sale or property transaction is accurately compiled and legally correct. You don’t want any disagreements about commission at a later time.
Get full property detail and title ownership correctly compiled for the transaction and the negotiations that may follow. Be prepared for questions and negotiation elements between the parties.
Follow the client’s instructions to completion. Keep the client fully briefed as matters shift and change. Information helps with negotiations.
Take plenty of notes as the transaction evolves. Most property negotiations are complex, and the elements of offers, discussions, and agreements will vary. Your notes are critical to transaction control. Every meeting, telephone discussion, or direct instruction should be documented.
If you need some ‘market awareness’ to help shape the thoughts of your client or the negotiating party, then gather plenty of comparable evidence from other local properties and transactions. That evidence should be statistical and visual, as well as verbal. Verbal comments alone don’t count much when it comes to client or prospect conditioning. Help your client or the other party to the transaction understand the elements of the local property market and recent prices or rents.
Most parties to a property sale or lease want to get some ‘saving’ as a final element of ‘closure’ on a negotiation. What is the best alternative to no agreement for each of the parties? They will be ‘holding out’ for their position and advantages, and somewhere in those facts will be a potential agreement. Know the negotiation ‘variables’ for each party and then position the negotiation around them.
Personal marketing for a top agent is a required process. It covers promotions and engagement across some different channels. A top agent will be using all available marketing elements to build their business. That will, for example, be websites, editorials, articles, social media, databases, telephone calls, and meetings. That is how they can build a solid marketing profile as an industry expert. The process of personal marketing never stops for a top agent. Get involved in promoting yourself and your skills locally. Engage with your target market.
When the final transaction documentation takes shape, understand the facts and capture the elements of the deal. Know how all matters should be documented; do so with accuracy and timeliness. All documentation should be served and prepared with full regard to local property laws and the instructions of the client.
With these things, you can control a property transaction most effectively from start to finish.
Communicate through your listing and property transactions with accuracy and timeliness. That will help in creating ‘closure’. Commissions are then easier to convert. That is how top agents do things.
When you work as a broker or agent in a commercial real estate business, a good imagination will help you see the available property opportunities that are around you in the city or town. Acting on those opportunities locally will be the next important stage of moving forward. Commissions and clients await your identification and action.
Stay focused and organized as you look for property opportunities. Use your imagination with a professional focus. Filter your ideas into property types, people, precincts, and levels of reality.
Track everything that you do and see, and do that in an excellent quality database program. It is easier to act on things when you see the ‘steps and stages’. Break down the complexity of things into levels that you can act on.
Creative Brokerage Vision
So, the factors of imagination that you want to nurture here are creative and visionary. Seeing the potential transaction, listing, or property development early is important. You are the broker or agent with the ‘property market awareness’; that information is of value to the clients that you work for.
With a fuller awareness of the property market, it is likely that you will see many things before others do, and particularly the clients that need help or want to expand or change their investments. Acting early on opportunities before other agents and competitors will help in converting the new business.
Capture the Ideas
How can you work with this valuable approach to your real estate business? Here are three useful ideas:
Carry a small notebook with you that you can use at any time to capture your thoughts and observations. That is particularly so with any things that you see or think about during the working day or after hours; capture your ideas. The act of writing things down will be very helpful in capturing the concepts, ideas, and facts that you come across every day. Most successful property transactions start from a small idea or observation that is acted on at a later time.
Mind-maps are a way of creating a vision or opening a complex real estate issue into a ‘roadmap’ of actions. One big issue or property event is usually a matrix of smaller steps or stages. There are plenty of mind-map programs that you can get to use on the computer or iPad. You can also use a simple blank piece of paper as a ‘mind-map template’ when you are working with complex issues. Get a simple blank piece of paper and a set of colored pencils, and then use those basic tools to extract your ideas. When you put something on paper you can act on the opportunity and the separate stages; you can see the ‘road ahead’.
Devote the start of the day to ‘brainstorming’ your business and your property market. The best time to do that is when you arise first thing in the morning. You can ‘brainstorm’ your thoughts over a coffee and breakfast, or perhaps before your regular exercise routine.
The message here is that you can productively use your observations from the marketplace to find opportunities in commercial real estate brokerage. You just need a few tools to help you be creative and visionary.
Some listings in commercial real estate are quite slow to attract enquiry and move to the next level of an offer or negotiation. That is where our creative professionalism is so important for the clients that we serve.
Sometimes, you will find that the listing will stay on the listing books for too long. In such situations, it is necessary to try for a listing extension. Your skills in client communication at that time will be fully tested as you ask for more time. The client must believe that you are still the right person to continue to work on the property and handle the challenges that it or the property market presents. Are you the best agent to stay on the listing for the future?
Time on Market Problems?
Why will a property take longer to sell? Try some of these for starters:
The property market is slow to respond due to economic circumstances in the region or the business community
Enquiry is low for the property type or location
It could be the wrong time of year to market the property
The price range for the property is too high or it is out of the range of most buyers
There are too many other properties on the market currently and those properties are not moving.
The target market for the property is too narrow or wrong for the listing
Not enough marketing was done at the time of initial promotion
Too many new properties are coming into the market creating a situation of oversupply
The business community is moving from a purchase priority to a lease priority
There are plenty of reasons for listing ‘stagnation’. You may also have other local issues that are also evident in your location, and those that you believe are fundamental reasons for the slower listing enquiry. Either way, you must know the reasons behind a ‘stale listing’ and its failure to attract local property enquiry. Strategy then takes over; that’s your job.
Ask for an adjustment to the method of sale or pricing if you believe that change will attract more enquiry.
Change the method of sale to suit the preferred target market.
From these issues you can create a timeline of changes for the client to see and consider. The clearer that you can be in this communication with the client will help you in winning a listing extension.
Personal systems are the foundation of progress and success in commercial real estate brokerage. Those systems can evolve in key areas of the business personally. In this audio program, I share the most important processes that I have seen and used over the years in working clients and prospects.
Brokerage momentum comes from clients and properties. The only way to get substantial penetration into those segments is through ‘process’. Have a listen to this audio to see how your ‘process’ would compare currently as a broker or agent.
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