When a commercial investment property is taken to the market for sale or lease, you will get some property owners that like to control the process and on that basis they can be very reluctant to give out the listing ‘exclusively’. They think that by spreading the listing across a number of local property agents, they will get the best coverage of enquiry.
Of course, that assumption is very wrong and quite counterproductive. Most open listings stay on the property market for a very long time. Exclusive listings sell faster due to the marketing efforts and dedication of the particular listing agent.
Here are some facts about ‘open listings’:
The client will not generally tell you the whole story about the property listing until you bring them an enquiry.
Many agents will be feeding the client at the same time with stories and ideas from the property market.
Negotiating with clients that have their properties ‘openly listed’ is a difficult process given that they will not generally trust everything you say.
Multiple agents confuse the client with conflicting market trends and evidence.
These listings will stay on the property market far longer and will by comparison have limited enquiry.
The marketing spend by clients will be limited and therefore enquiry will be ‘luck’ generated more than personally driven.
These clients think that their ‘friend’ in the other brokerage should have a chance to sell the property as well.
Inflated pricing will generally attract open listings. Why would you take on a property that is priced well above market?
So if you really want to market a listing of this type, what do you have to do? Try some of these ideas:
Pitch the listing at the right price. If the client will not adjust to the market conditions and price ranges, then walk away from the listing.
Condition your client to the types of targeted buyers as you see them. You can use the results of any inspections to do that.
Show the client the limitations on inbound enquiry for those properties without ‘exclusivity’. Given them the chance to take up ‘exclusivity’ with you.
Convert some vendor paid marketing funds. If the client is serious about wanting a sale, then they need to spend some money on marketing. Show them why that is the case.
Give plenty of feedback so the client knows that you are the better agent helping them.
You can convert ‘open’ listings if you really try. It is hard work and the pressures of other agents talking to the same client can be derailing to the results that you are promoting. Make your choice to work on the best listings and clients that show a reasonable chance of conversion.
Many times I have seen brokers and agents change brokerage and property market location thinking that the change will bring them more opportunity with listings, commissions, and clients. Whilst that can sometimes be the case moving to that new brokerage, do not overlook the issues of personal performance.
Many agents and brokers struggle with the requirements of personal performance in commercial real estate. They are commonly not prepared to do what it takes, or disciplined enough to take the necessary steps with personal performance; they fail to develop the correct disciplines to improve their market share personally.
Like it or not, the results that you achieve in commercial real estate are largely personally generated. The brokerage and the real estate brand that you work for can only support you in a minor way with a small amount of enquiry and market share. Most of the sales and leasing opportunities created largely come from personal efforts and prospecting activities. Your database is so important in the process.
Know Your Personal Performance Issues as a Broker or Agent
Before you consider moving brokerage, have a serious look at what you are doing every day with prospecting, marketing, database activities, and your client list. Those four factors will have a lot to do with the results that you achieve. It is a lot easier to improve personal performance than to waste significant time in changing brokerage and a new sales and leasing territory.
Here are some ideas to question if you must move to a new location as part of a new brokerage structure.
Location – Understand the location and the territory that will be yours to farm and extract listings from. Get the history of the area when it comes to sales and leasing activity. Determine how much more new business can come from that area.
Other Agents – Consider the amount of competition and other agents in the location. Some of those agents will be well established and top performers in their own right. Would you be able to compete against those agents and on what basis? You will need a strategy of approach when it comes to marketing yourself in a new area.
Sharing Commissions – Look at the commission splits that apply to any sale or lease transaction that you create. The commission splits are likely to be influenced by the administrative costs and support services provided by the brokerage. It is far better to work for a brokerage that provides a comprehensive support structure, thereby allowing you to get out into the marketplace to generate leads, listings, and commissions.
Property Specialization – Determine if and how the brokerage will allow you to specialize in a property type within a defined geographical area. Can you be given exclusivity to work the patch and the property type?
Database Ownership – Who will own your database and the information contained in it? Given that you will be loading the database with fresh leads and opportunities, who will own that data in the situation where you want to leave the brokerage and move on? It takes months if not many years to establish a good database of buyers, investors, and tenants. In an ideal world, that database should be your property in all respects. Ask plenty of questions when it comes to the ownership of this valuable information.
Operational Costs – There are certain operational costs to be considered in working as a broker or an agent. Desk costs, telephone, administrative support, marketing materials, and stationery are commonly charged back to the agent or broker. Understand how these things work and how they will impact your commissions earned.
So the message here is quite clear if you are considering changing brokerage or location. Get all of the facts relative to the market, the brokerage, and the location. You can and should also assess factors of personal performance to ensure that you are fully committed to prospecting, client contact, and growth of market share. That’s how top agents rise to the pinnacle of the market in their location.
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