Choose the Best Clients to Serve in Commercial Real Estate
In commercial real estate brokerage today, there are many types of clients and properties to work with. That being said, it is best to be selective when it comes to clients and property types.
The local property market will be changing throughout the year as will the enquiry rate between tenants and buyers. Most agents and brokers will receive requests from tenants and buyers for particular property types and locations. That being said, there is always a deal to be put together if you can find the right property listing to satisfy the enquiry.
Understand the differences between working for a property owner, verses working for a tenant or a buyer. Your commissions in the process need to be protected. Understand and ensure that you have the necessary listing authorities and commission protection processes in place.
Many agents and brokers have been caught out by tenants and buyers that have been less than honest and open when it comes to seeking a new property. If you are going to introduce tenants and buyers to a listing, make sure that you have your commission relationships protected.
Here are some ideas to help you with choosing the right clients in commercial real estate today:
- As a general rule, stay away from the low quality listings in both sales and leasing. They will waste your time and any sale or lease that could occur will be difficult and slow.
- Always check out the client and their motivations as part of taking on a listing. A good question and answer process will take you into their mindset and their motivations. When in doubt ask more questions.
- The conversations and connections that you have with property owners and clients should be documented. The records of conversation are sometimes valuable to supporting a negotiation or a dispute. Keep your file records from every listing and client connection for many years as part of a liability protection process.
- Check out the property listing for legality and encumbrances. Some properties will have levels of difficulty to be solved prior to any marketing process commencing. Look for the issues and hurdles that could frustrate the marketing and inspection process. The weaknesses in any property will come to the fore when a due diligence process is undertaken.
- When you control the listing exclusively, you can work with the client in a productive way. Most exclusive listings should be for a long period of time. In that way you can commit to the required levels of marketing and prospecting. Any exclusive listing should be directly marketed on a personal basis into the local business community. The listing should also be taken to the local property investors and owners. Given that all this should occur on a personal basis, many telephone calls and letters will be generated for an exclusive listing campaign. That’s why you should get a longer listing term.
So the message here is that you can be quite selective when it comes to a new client or prospect in commercial real estate. Establish some rules and some guidelines to help you with working with the right people in the right way.
