Commercial Real Estate Agents – Property Inspection Rules You Must Set

boardroom in commercial office
Undertand the commercial property and how to inspect it.

When it comes to listing commercial and retail property today the listing process is perhaps one of the most important things that will have an impact across your entire marketing campaign and property negotiation.  As a commercial real estate agent it is a matter of gathering all the correct information, and preparing the client for the upcoming inspection process, marketing effort, and negotiation.

Here are some listing strategies that can be adopted in your commercial real estate agency:

  1. From the outset, it is important that you understand the client and their current motivations.  There will be reasons behind their actions in marketing a property today.  Those reasons will impact the pricing, the marketing, and the eventual negotiation.  It may be that they have certain challenges relating to property ownership that need to be satisfied.  Discharging a debt could be part of that process.  Ask the right questions and get to the real facts.
  2. Comprehensively inspect the property so that you really understand the target market that will be relevant to the marketing campaign.  Review all of the improvements within the property, the layout of the property, services and amenities, the precinct, and the property zoning.  All of these things will align to some form of strategy when it comes to property promotion.
  3. The prevailing market conditions should be assessed relative to the property type and location.  You need to know exactly how much enquiry is coming in for a property of that particular nature.  When it comes to people making property enquiry today, what are those people looking for when it comes to property purchase or property occupancy?
  4. Check out all of the other properties locally that could be competing with your listing.  The assessment should include improvements, time on market, pricing, services and amenities, agency marketing strategy, and client motivation.  Some of those listings will give you hints as to what works and what doesn’t in today’s property market.

As a priority, your listings today should be on an exclusive basis wherever possible.  That exclusive listing process should include vendor paid marketing funds.  In only this way can you comprehensively connect with the buyers or tenants in the local area.

An exclusive listing with a satisfactory marketing campaign will always shorten the time on market.  In most cases, that is what the client will require.  Show them the advantages and the differences between open listing and exclusive listing.  In many respects, it is not unusual for some top agents to walk away from open listings.  Open listings are generally a waste of time unless you know that the property is well positioned for potential enquiry within your database.

Tips for Inspecting Commercial Properties for Sale or for Lease

commercial agent holding folders
Prepare for the property inspection with all of the relevant information. Take plenty of notes.

In commercial real estate you will be inspecting many different properties for many different reasons.  Over time this can become second nature, however complacency in the property inspection can see you overlooking an important item or fact that can have a real impact in your property transaction.

Given that there are a few different property types that you will work on, you can have a checklist approach to all of them.  In other words you can a specific checklist to work on each property type.  For example:

  • Office property single level and or single tenant
  • Office property high rise with multiple tenants
  • Retail property single shop
  • Retail property multiple shops on single level
  • Retail property medium to larger size with multiple tenants
  • Industrial property of various sizes including warehouse and office configurations

All of these property types can be quite specific when it comes to inspecting and listing.  Respect the differences and have a selection of listing checklists and questions that you would ask relative to the property type.  When you do this it sends the right message to the client that you really do know what you are doing and that you have the knowledge to handle this property well.

In many situations you will be inspecting the property with the client in preparation for potential listing.  For this very reason it pays to have a comprehensive approach to documenting and questioning as you move through the property.

Here are some things to incorporate into your inspection checklist:

  1. Get the title search and legal property description before you meet with the client.  This will help you will the facts of what the property is and how it is positioned in the location.
  2. Check out the zoning and the permitted use of the property relative to the existing local development plan.  If you are going to sell or lease a property, it pays to know that it is ‘legal’ in its function.
  3. As you move through the property with the client, take notes of what is said as you may have to fall back on those notes later in evidence or in support of key negotiations.  Some clients are well known for selectively telling you things about the property, and not all the issues that you should know that could impact the sale or lease.  Look at the property with a questioning mind; look for the issues and the problems that a property presents to you in marketing and negotiating.
  4. Take digital photographs as you move through the property as this will help you remember the conditions and configurations of the improvements.
  5. Services and amenities should be documented as tenants or buyers to the property will want to know those details.

As a general rule, you should not ‘price’ a property until you have had time to consider the property detail, reviewed the competing listings, and looked at comparable sales or rentals.  If you do this effectively it will help make the listing of the property more relevant to the market and the current levels of enquiry.