Working in commercial real estate today as an agent or broker, you simply cannot repeat the mistakes and the faults of others in the industry. Observe and then avoid the weaknesses and errors of others. (NB – Need help? You can get our commercial real estate tips and ideas here)
There are plenty of indicators to show you exactly what those real estate performance problems are and then you will know how to avoid them. Focus your time and your efforts on the things that really work; learn from the others around you. Don’t repeat their dumb mistakes. It is a fact that you can easily waste a lot of time and money in the industry, especially if you don’t have a plan and a process to grow your business.
Every agent or broker will have strengths, advantages, and skills to bring into their career.
Strengths and Weaknesses to Work With
The strengths of the individual should be identified and then optimized; it is a personal process. Take steps to remove the weaknesses of a property type, location, and or a property market.
The real estate market will change throughout the year and across the different years given the pressures of the economy and local business sentiment. Be ready for the variations in a location and watch the market indicators as they shift and change.
Common Mistakes in Commercial Real Estate
Here are some of the more common mistakes and choices seen in our industry that you can learn from:
- Not building a property and client database – from the very start of your career, get involved with people locally and build your list. Establish a database of information from meetings, telephone calls, properties, inspections, and property opportunities. Put the local population into your business through ongoing contact. Revisit your database every day to connect with existing contacts and clients. Regular contact is required to build the appropriate levels of trust and market coverage. Put yourself into your business. Market yourself and your points of difference. The ‘money’ is in the list.
- Not getting to know all the relevant local people – some people are more valuable than others when it comes to commercial real estate investment, ownership, and occupancy. Look at the different groups of people that you should be working with and then segment those groups in your database as part of your contact model.
- Sitting in the office waiting for the telephone to ring – new agents tend to expect the inbound phone call, or a person to come into the office. That is not the way things happen in our industry. The listings are always available for those that get into the location and meet the people. Daily prospecting is required.
- Failing to specialize in a property type for a location – you cannot be a skillful agent across all property types and locations. There is just too much information to understand and track over time. Choose a few property types or perhaps even a single property type to work on as you grow your market share and your career. In that way, you can capture market information efficiently and consistently. Specialization allows you to provide in-depth and relevant information to the clients that you serve; it also allows you to find listings more readily, and negotiate more efficiently.
- Not converting vendor paid marketing in the listing process – if the property owner wants a result in a sales or leasing transaction in a timely way, marketing and promotion is required. That will involve local area coverage and direct marketing efforts. Ask for vendor paid marketing funds with each listing that you convert.
- Taking open listings and spending too much time on them – controlled listings are important when it comes to commissions and negotiations. Top agents avoid open listings so that they can focus on their exclusive listing stock and valuable clients. Adjust your property presentation and pitch towards exclusivity. Ideally, you should be converting at least 75% of your listings on an exclusive basis. Don’t waste your time with open listings; your time and your skills are too valuable for that.
- Taking on too many listings at once – while it is nice to have plenty of listings to quote with a property inquiry, you just cannot work on any more than about 15 exclusive listings at any one time. Exclusivity takes commitment. Listing and client service is important.
- Avoid low grade listings – Choose your listings and your marketing methods with care. Work for the better clients and select the good quality properties as part of that exclusivity process.
- Avoid ‘generic’ marketing and promotions – when you have converted a customer and or won a listing, the real work starts. Take every exclusive listing and directly promote it to the targeted audience and location. Get involved with your listings on that basis. Don’t just put a property on a website and hope that you will get inquiry. Get involved with your property listings directly and efficiently.
- Think ‘local’ in all that you say and do – you are the broker for the location so market yourself accordingly to every property owner and business leader in the precinct. Provide regular market updates in digital and social media form; spread the word into the region about the listings and the market ideas that you may have.
So, there are some specific things to work on if you are to avoid the common mistakes in the industry. Some agents and brokers take months if not years to appreciate the importance of the items mentioned here.
What can you do now? Take these items and understand the ones that can work for you in your career; merge them into your business processes and practices. Refine your skills through professional development and property specialization for the town, city, or the precinct.