If you are working as a commercial real estate agent or broker, the necessity to make commission will be a regular and frequent focus as part of new business generation. There are some specific rules to follow when it comes to attracting clients and growing the commission opportunity.
Commission Generation Rules
You can make a lot more commissions over time, and also lift the commissions generated from any average sales and leasing transaction if you follow the rules. Here are some ideas to help with that in making more commissions per transaction:
- Understand the linkage between services – One property transaction can lead to another. The same can be said for professional property services. In other words you can move from a sales to a property management opportunity, or a leasing to a property management opportunity. Over time those property management appointments can revert back to a future sale or a leasing opportunity.
- Do not discount your commission rates – There is no reason to discount your commission when it comes to listing a property in servicing a client; a client looking for a commission is not a genuine client requiring a result. A discounted commission will also do nothing for your focus and commitment to the listing itself. Any small monetary saving achieved by the client in the commission discount will be negligible when compared to the superior results you can provide and achieve from total commitment to the listing. A good commission helps you get on with finding a tenant or buyer in a productive way; that then can shorten the time on market.
- Ask for listing exclusivity every time – Only take on exclusive listings. In that way you will control your listing stock, the client, enquiry, and the negotiation. A high quality property deserves the exclusive marketing process supported by vendor paid marketing. Adjust your pitch and presentation to the client to ensure that you are correctly covering the advantages of exclusivity. Improve your presentation so that your exclusive listing conversions are frequent and substantial.
- Referral across listings – Understand the linkage across properties, locations, and property types. Any genuine enquiry that has been fully qualified should be referred to a number of listings in a comprehensive way. Pay close attention to the current listing stock within the brokerage and with your peers. Be prepared to introduce your clients, buyers, and tenants into other listings that may be appropriate for their enquiry.
- Commission per transaction – Look at the averages that apply to the standard sale or lease transaction. Soon you will see how you can lift the quality of your listing stock and improve your commissions accordingly. Many small time consuming property transactions can be replaced by higher quality larger property transactions with better commissions.
- Quality listing stock – It is a fact that quality listings will always create better levels of enquiry. If you deliberately focus on high quality listings, you will find that greater levels of enquiry will be achieved from the average marketing campaign.
- Marketing strategy – When it comes to promoting any property listing, focus on the strengths of the opportunities of the property when it comes to advertising copy, media choice, and promotional method. Show the local property market that you are the expert when it comes to promoting top quality properties today.
- Success letters – Every successful property transaction should be communicated back into the local area, the businesses, and the property investors. Use success letters for that process. Encourage local people to talk to you about the results of every property transaction negotiated and successfully completed.
- Long term relationships – Get to know plenty of people in your local property market that could need future help with property over time. Keep in regular contact so that they remember you and respect your skills as a top local agent. By ‘regular contact’ I mean that you should be talking and interacting with every person in your database at least once every 90 days. You will need to set aside 3 hours in your diary every working day to maintain that level of client contact and prospect interaction.
To improve the levels of commission that you achieve in commercial real estate brokerage, it is simply a matter are focusing on the factors the generate results. It is also important to track your results and market indicators. Look for the things that are happening and those that are changing. Adjust your marketing and prospecting efforts accordingly so that the better listings and the larger commissions are part of your business plan and personal focus.