In commercial real estate brokerage, many tenants will approach you seeking property information and potential property occupancy. Some of those tenants will be more or less genuine than others. Importantly you will need to check their property requirements through a dedicated and direct qualification process.
A special note should be made here that some other competing agents locally will masquerade as interested tenants, for the purposes of getting property information and landlord contact detail. For this reason, always focus on the exclusive listing side of the business so that your clients and quality listings are protected and locked into your brokerage for a solid period of time.
Keep the competing agents and time wasting tenants away from your property listing information and clients until you have fully qualified the contact. Don’t be too eager to give out information at the early stages of property enquiry.
Here are some questions and processes to help you in doing that:
- Understand who you are talking to by name and get their contact detail. A genuine tenant will give you the right information when you ask for it. If they are reluctant to tell you the things that you need all require, then be very selective with what you tell them about the property.
- Understand how they have made contact with you, or how they have found out about the property. This information will be valuable when it comes to establishing future marketing campaigns and in tracking relevant enquiry.
- If they are coming to you from an existing listing with and from a signboard, they will know about the location and the general aspects of the property. On that basis you need to understand the requirements of the tenant when it comes to location, services and amenities, property improvements, and tenancy configuration. Given that you are talking to a business owner or proprietor in most circumstances, they will have certain needs and challenges when it comes to business operation and staffing. The property needs to match into those requirements. There will also be factors applying to transport, customer access, car parking, storage, and building configuration. Each property type will have certain elements within each of those categories to consider.
- Question the tenant about their rental budget in changing property, and their experiences with leasing in other locations. Make sure that they can afford the property in question.
- Find out if the tenant has been inspecting other properties with other agents. If that is the case, make sure that you have the necessary checks and balances in place to protect your listing. There have been many cases where the tenant can attempt to deal direct with the landlord or through other agencies and brokerages.
- Any new tenant introduced to a property should have a proven track record and a level of business stability. You will need to understand those factors before you introduce the tenant to a negotiation with the landlord over one of your listings.
In covering all of the above issues, there will also be factors of timing when it comes to a new lease negotiation and property access.
As a general rule, a property inspection should not occur with a potential tenant until you have completely qualified their intentions and needs. Don’t waste any time with tenants that tell you only half of the story. Be sensitive to those tenants that are not being open and honest when it comes to property choice and selection.
Many top agents and leasing executives are very familiar with the requirements to qualify and control the inbound enquiry process. Over time you will become an expert at the qualification process before you get too anxious to move to the next stage of inspection and negotiation.
In preparing for the lease negotiation, ensure that you completely understand the trends of market rental, vacancy factors, incentives, and standard lease terms and conditions. In this way you can add valuable strength to the negotiation on behalf of your client with this new tenant.