When you take on a commercial property for lease or sale, consider the potential of the property to attract enquiry and achieve a result. The best properties should be given a larger percentage of your time and effort.
Assess your listings on the basis of:
- Price or rent range – How relevant is the asking price or rent to the current levels of property enquiry?
- Improvements – Given the current improvements in the property, how do they match the end user or buyer?
- Highest and best use – If there is a better future for the property in any redevelopment or zoning change, how will that impact enquiry and your marketing efforts?
- Location – Some locations are better than others and will generate lots of enquiry. Build your marketing efforts around locational advantages.
- Presentation – Given the condition of the property as it stands today, will the presentation enhance or hinder the promotional efforts and inspections?
- Availability – Is the property available now for purchasing or renting? Are there any issues that could slow down the negotiation and settlement?
- Client motivation – Some clients are highly motivated to get a result in a sale or a lease. That will then have a reflection on the asking price or rent, and also the negotiations.
- Marketing money – Using vendor paid marketing money is part of an exclusive listing process as well as the promotion of a quality property. Design and improve your listing presentation and pitch to achieve higher levels of vendor marketing funds.
- Size of the land and building – Some properties are of the ideal size for the current property enquiry and the local area. You will know what that ‘size factor’ is for your town or city. Concentrate your efforts on the listings that people want.
- Tenancy mix – If the property is an ‘investment’ and contains tenants, review the tenant mix to identify the lease and rental return opportunities that can be promoted in your promotional campaign.
- Net income and Capitalisation or Yield – The net income for the property may be one of its strongest points. Analyse the gross and net income and then compare it to current levels of yield or return on investment locally. There may be an investment opportunity worth talking about and merging into your property promotion.
- Method of sale or lease – Some methods of sale or lease are better than others. The observations that you make here are locally based. Match the method of sale or lease to the property and the way in which you expect to get the best enquiry and inspections. In most cases the right choice will give you good enquiry coming in and a faster result for your client.
- Enquiry potential – A good quality property in a prime location will create solid levels of inbound enquiry. From a quality property you will attract more local property investors and business owners. It directly follows that every property listing should be tracked for the type and volume of inbound enquiry during the promotional campaign. When you know what works from a marketing perspective, you can promote a property well.
- Marketing campaign coverage – If you have a good volume of vendor paid marketing funds to spend, you can run a comprehensive promotional effort. Your property listings should be rated relevant to campaign size and coverage.
- Price re-fresh frequency and comparison to market – Every 14 days any quality exclusive listing should be refreshed in format, promotional copy, campaign placement and price (or rent). This then means that you will need to stay close to the client and help them understand the changes necessary with their listing to improve, enquiries, inspection rates, and negotiations or offers. Communication and support from you will help the client with these decisions.
- Premium or elite listing status online – When you use the online internet based industry portals for property promotion, the client should be encouraged to pay for an elite or premium promotional package. It is easy to show the client just how dramatically better the results of this listing type are in comparison to ordinary listings online.
- Target market – Knowing the property for what it is and how it presents, just how does the property sit in attracting a target audience? Some properties are so specialised that the target market is very narrow. Watch for the differences here and work the properties that attract the buyers or tenants as the case may be locally.
- Competing listings – If you have lots of competing listings on the market locally with other agents, then you will need to make your listings more relevant and attractive. Show the client how their property can be positioned more favourably than others in the local area.
- Listing type (Open or Exclusive) – Exclusive listings are essential if you want to grow your market share and improve your commissions. You can work the client and the property for a good period of time without fear of another agent taking the deal or the client’s attention away from you.
Taking all of these things into account you can easily determine what listings are of the higher quality, and those that offer the greater potential for a successful sale or lease deal. It directly follows that your listings should be split into three distinct categories. Split your listings into 3 categories:
- Level A – They are those exclusive listings that are of the best quality and have the highest chance of success. Devote 60% of your time to this group of listings.
- Level B – These are the listings that can be converted to ‘A’ class with some work and effort. Devote 40% of your time to these listings.
- Level C – These are the listings that are of poor quality or are ‘openly listed’. They are also those properties where the client is unrealistic in market and price or rent expectations. Devote only spare time to this group of properties and clients. Any deals coming from this group would be a result of luck more than anything else.
From this listing analysis you can see how your choice of clients and properties can have a lot to do with your inspections and negotiations. Focus on aspects of ‘property or listing quality’ and more inquiries will come your way as a commercial real estate agent or broker.