Tips for Presenting Offers in Commercial Real Estate Brokerage

The offer and counter offers that occur in commercial real estate are the end result of a negotiation with qualified parties.  It is the ‘business end’ of the deal where people are seeking to bargain and achieve an outcome or benefit.

Some offers are easier to negotiate than others and a lot depends on the ‘reality’ of the parties to meet market conditions.  That’s where the skills of the agent or broker can make or break a deal.  Experience at negotiation is a valuable asset to have.  Market information will help you bring logic and reality to any disagreement or offer between the parties.

There are a couple of things that are really worth practicing in commercial real estate brokerage.  They are:

  • Prospecting
  • Negotiating

The two skills are used so much in any sale or lease situation.  They will have a great impact on your ability to earn reasonable income in the business.

So if you are going to present an offer in a sale or lease transaction, here are some of the factors to consider and handle:

  1. Make sure that you totally understand the property and its strengths and weaknesses.  It is likely that some factors from the property will be hurdles in any negotiation.  You will have to work through those issues with market evidence and strategy.
  2. Competing properties and the market conditions are likely to put pressures on any negotiation.  Understand how those things can occur and have some strategies ready to work through and use.  The parties to a sale or lease will use facts from the market to build their case for an offer at a particular rent or price.  Ultimately you should know the market better than others.
  3. The property detail should have been totally investigated in any listing process.  In that way you can remove any property factors or questions that arise when negotiations start.  If a property is impacted by something that is unusual or of significance, you will need the right information to help you through the negotiations that arise.
  4. The prospective tenant or buyer should have been qualified fully before any inspection and negotiation was to occur.  Make sure you are working with people that have the capacity to act.
  5. Understand the instructions of your client when it comes to the offer and negotiation.  There are some targets and issues to match for your client.  Build your negotiations around the facts that your client wants handled.
  6. Every offer should be supported by correct documentation and valid consideration (money).  Make sure that every negotiation that you start is supported at the right time by those factors.

You can add to this list based on the property type, complexity, and the parties to the deal.  Be prepared for every negotiation by working well in advance with key issues and targets.

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