I was having a coffee chat recently with a real estate friend. We were talking about commissions and the ease or otherwise in achieving commissions. As you can imagine there were many things to talk about.
This is what we felt were the observable issues:
- You will always get your share of tough deals in commercial real estate so be prepared for some lengthy negotiations with some clients and some listings (there are signs to look for)
- Leases will help you build your activities in the market, so start with leasing property to get to know people and the prices and rents in the market today
- From leases you will get to know the right property owners and from that you can build on sales activity
- Small leases are just as much work if not more than larger leases in negotiation and closing the deal
- Commissions are larger in sales per transaction as opposed to the average leasing deal
- Discounts are not the way to win new listings; relevance and results are the best way to attract new listings
- Creative marketing always helped improve inbound enquiries
You may be able to add to the list based on your location and property market; however the key fact here is that property sales will give you larger commissions on average per deal than leases. It directly follows that you will or should transition from property leasing to sales over time. A personal business plan will help you do that.
Moving into sales is a deliberate shift in marketing efforts and property knowledge for an agent. Knowing the property owners and the sales deals will help you make the move.
So to make this happen for you, it is a matter of getting to know the quality properties and the investors in the area that need help (or one day will need help) in selling. Here is a plan to do that:
- Street by street check out the properties and chase down the owners to talk to them. You must contact them directly. A conversation is the focus of prospecting at this level. Don’t waste time in sending letters that are not followed up. If you value your skills and want to build your property market it takes effort and systemisation.
- Know what is happening locally in listings, prices, deals, and time on market. From these things you can build a profile of the best marketing methods within the property type.
- A successful sales or leasing deal can be the trigger for success letters into the local area of property investors and property owners.
- A quality listing is a trigger for direct marketing locally using telephone calls and door knocking.
- Develop a strategy to list property for sale using the exclusive listing approach and vendor paid marketing funds. Your listing pitch and presentation strategy to the client will need to be very special and relevant to the clients that you work with.
- Property marketing today can be innovative and direct to spread the word to the right target audience of buyers. Ensure that your marketing packages are designed to attract real interest and impact across your local area. Your packages must stand out as better than the marketing efforts of your competitors.
To go back to the point that commissions are easier to achieve in the average sales transaction, you should transition into sales activity as part of your personal real estate agent business plan.