How to Handle Client Resistance and Push-back in Commercial Real Estate Brokerage

In commercial real estate brokerage, you will almost always get a degree of client resistance when it comes to closing on a typical transaction in sales or leasing.  Most clients need to think about the facts of the deal, and consider the impact of full offering or the transaction.  Align your thinking to the clients situation and the market conditions.  There are things that you can say about both and help balance the decision for the client. (NB – need negotiation tips? You can get our ‘Snapshot’ course for brokers right here – it’s free)

So, what do they do as part of slowing down the deal?  Sometimes they will refer the document or the elements of the deal to their property attorney or accountant.  Either way, you must generally go with the flow and provide the best elements of logic and opportunity to the client as they move to a decision.    You should help them in being fully informed as they move ahead.

Market Aware

A ‘market savvy’ client will usually listen to your factors of logic and opportunity providing you frame the information with market evidence.  It is difficult for a client to refute market evidence.  Keep a catalogue of comparable local transactions with you in both sales and leasing for that very purpose.   Support your client with market evidence, and build solid levels of trust throughout the property listing, marketing, and negotiation process.

As part of every property transaction and in all the phases of the negotiation, keep the client fully briefed and aware of the prevailing market conditions, and the comments made by the inspecting parties when negotiating.  Use the comments from inspecting parties as elements of feedback to the client throughout the marketing campaign.

Alternatives Work

To reduce the difficulties experienced with clients and the push-backs that can typically occur, provide the clients you work with a few alternatives to the ultimate decision.  Most clients like to make decisions based on logic and market evidence, and yet they still want to have control of the outcome.  The control can come through a few alternative offerings or deal structures.

As you prepare for any property negotiation, make sure you clearly define the alternatives available for the client in each case.  Understand who your client is in the transaction and then make your recommendations to them about the transaction.

Solutions to Resistance

Here are some ideas to help you resolve client resistance problems in both sales and leasing:

1. LOCAL: Whilst you can tell the client what is happening in the local area, you should do better than that to help their decision and negotiation direction. Provide something tactile and visual that they can relate to about local property.  Hand them some statistics and some graphs that relate to locally based comparable property trends in prices and or rentals.  A simple visual approach with your market evidence will help you convince the client of the necessity to be wise and timely as they make their property decision.  You can ‘close’ more transactions when you provide visual material.
2. ALL THE FACTS: Look at all the alternatives to a property decision. Understand the tenant or the buyer that you are negotiating with and the alternatives they may have when it comes to property choices, the timing of the decision, and the budget that they can afford.
3. COMPARE: Track all the other property listings in the local area so that you can appraise critical factors such as time on market, pricing shifts, and rental outcomes. Throughout the year the property market will shift and change thereby impacting levels of inquiry, marketing strategies, and the best methods of sale or lease.  When you have all the facts, you can make valuable choices and clear recommendations.
4. DIALOGUES: Practice will always help you improve your client interaction and dialogue. Understanding the conditions of the current property market and the types of assets that you work with, itemize the different challenges that you typically see and experience.  You can then use those factors as case studies and examples when you practice your dialogue in your brokerage team.  Share business experiences and negotiation outcomes in the brokerage team as part of your regular weekly meeting.  There are many ways to resolve a client impasse or misunderstanding.  Practice will help you in so many ways.

So, the message here is that you can and should prepare for the variations of client resistance and client negotiation in the current property market.  Understand the challenges of commercial real estate in your location today, and practice your dialogues accordingly.