In commercial real estate brokerage there is a good degree of documentation and paperwork in any average transaction, be that in brokerage sales or leasing. The paperwork that you create in brokerage should be reflecting the factors of the transaction and intentions of the parties. That documentation needs to be accurate in every way possible. (NB – You can get our free commercial real estate course right here)
Some transactions can be very complex and therefore time-consuming to negotiate through and to close on. Through those activities, remember exactly who your client is in the process and what their targets may be from a property transaction perspective. Ultimately they pay your commission and on that basis their wishes should become your goals and targets in marketing and negotiating the listing for a positive result.
Get to Know all the Property Facts
Of course some agents and brokers struggle with documenting certain types of deals; some transactions will always be complex in some way or form. The tenancy mix, the cash flow, or the negotiation situation may dictate special documentary procedures and clauses as part of the contract or the lease.
Make sure that you understand the best ways to go about documenting a deal, and if in any doubt, seek help from the people that understand what needs to be done.
That documentary issue is an education problem that needs resolved through knowledge improvement on the part of every agent and broker. Be prepared to the deals that you have to do in both sales and leasing. Understand the challenges of the property market in today’s terms, and how you need to capture all of the facts of the transaction your clients and the property.
You Will be Busy
So you are going to be busy as an agent or a broker with the property documents and the elements of each and every negotiation. There are plenty of problems, questions, and obligations that evolve from the volumes of paperwork for a sale or lease transaction; recognize that as part of brokerage administration. You can always get some help with that administration with deploying the appropriate support staff and administrative team.
So there are some things to think about and improve with deal documentation and transaction activity.
Critical Facts to Know
Here are some interesting facts to understand and appreciate when it comes to brokerage listing, marketing, and transaction documentation:
- Every transaction will be unique and different across sales and/or leasing. The elements of the deal, the facts of the property, and the intentions of the parties should all be fully understood before the paperwork is commenced. When in any doubt, ask more questions of the people involved.
- Always ensure that you are dealing with accurate title, property ownership, and property information. Question the client deeply about the existing property facts and documentation. Ask to see the original paperwork where necessary.
- Some properties of an investment nature can be particularly complex when you take into account the tenancy mix, the leases, and the income cash flow. All of those issues should be checked completely and thoroughly before any property is taken to the market and certainly before any negotiation is entered into. Check the integrity of the leases, the tenancy schedule, and the existing tenancy mix. Look for the problems and the omissions that are likely to exist in the property.
- Delve into the history of the property so that you can fully appreciate asset usage and change over time. Ask about the extended title matters such as encumbrances, rights of way, boundary rights, surveys, improvements constructed on the property, and any factors of risk or volatility that could affect a sale or leasing transaction. When in any doubt, ask more questions.
Many an agent or broker will struggle from time to time with a complex property transaction in sales and/or leasing. The uniqueness of the transaction needs to be fully explored before the documentation is created in final form and signed by the parties.