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.
In this audio program, John Highman talks about the different ways of prospecting and how commissions can be improved when you get your new business focus refined and tuned to particular properties and clients.
Learn about the challenges and the opportunities with:
Clients as Investors, Business Owners, and Developers
In simple terms you can improve your real estate business.
A sales team in commercial real estate brokerage is typically (or should be) a group of like minded sales professionals in control of their market, their clients, the territory and their special property types. When you look into the team there are special indicators to watch and track as the team gets results in listings, clients, commissions, and referrals.
Commercial property today is as competitive as ever; top sales teams should be working to a plan and strategy for their location. The real estate ‘year’ is most commonly between February and November each year. Most of the sales and leasing transactions will be done in just those 10 months.
In this audio program, John Highman talks about the importance of tracking and monitoring the performance of the sales team.
In commercial real estate brokerage, you must know where your new business is derived from and where the best commissions are likely to come from into the future. Some new property business can be much more lucrative for you over time. Understand what that new business looks like and how you can find it. Focus into the segment that works for you.
Your opportunities will come from your local property market. The way to find that business is to specialize and improve your services accordingly. Top agents are very good at just one or two things, and then they drive themselves into that or those segment(s).
Where then are you likely to find the best business in both listings and commissions into the future? When you know your skills and knowledge, you can do something with growth and market share. You can also practice and improve your skills on the things that really matter. That’s how you generate more commissions and listings in a relevant and real way.
Your special market segments?
Consider the special market segments below and how you can select the right category of business activity. Ultimately strive to grow and shape your market share as a broker or agent over time. Plan your way forward:
Sellers agent – If you are a seller’s agent (or want to be) then you must know how to pitch and present your listing services competitively and directly to the people that matter. This is the ‘pointy end’ of our craft; pitching and presenting is something that will always vary based on the property and the client. Ultimately you will need a good database of clients to focus on so you are there to help them at the right time when they need a property solution.
Leasing agent – Three are always businesses looking to relocate locally. Spend some time looking into the business community and what they want from a property and improvement perspective.
Property management specialist – The management services to be offered today to the owners of any quality investment property can be quite unique and comprehensive. Your fee structures should be as comprehensive as your services offered.
Property performance improvement – Can you improve a property and its performance? Ultimately if your fee in property management is based on a percentage of passing income, then you can improve your fees through improved property rental cash flow. When the landlord wins, you also win.
Lease negotiations – Every lease negotiated deserves a reasonable fee. The value of a lease into the future is sustained as long as the lease is structured with due care.
And so the list goes on. Can you see the opportunity here? Specialization works in commercial real estate brokerage.
Look at your location, your client segments, the levels of professional services offered by your competition, and then understand exactly how you will pull in your commission and what your professional services provide your clients. You will never have a big problem in setting your professional fees if you and your services are regarded as the best available for the client and their property challenge.
Here are some other valuable service alternatives for you to open up into as a real estate agent for your location:
Tenancy mix strategies
Your ability to earn money as commission and to convert listings will be based largely on your skills and knowledge. Practice what you do and learn as much as you can. That is what our business is all about.