Have you ever come across a commercial real estate client that thinks their property is worth more than what the market will deliver? I would say just about 90% of clients fall into that category when first taking their property to the market.
It takes a while for reality to ‘kick in’ when it comes to property marketing. Unfortunately the first few weeks of any property marketing effort are the weeks of getting results and enquiry; if the property is priced too high during that time, the client (and you) can be wasting a lot of time and money.
The important thing is that you help them understand what is really going on out there and what they can do to work within it. It should also be said that you should not take the listing onto your books if the client will not listen to reason and the price is well away from market. You do not want to be known as the agent that lists and cannot sell or lease. Results are important in this industry.
Here are some facts:
- Property prices do not go up forever. They will sometimes slow, stagnate, decline, or reverse. The property market is based on a cycle of change and churn. Our opportunity is in serving clients and helping them with that change. As agents we need to know how to handle ‘change’ and help our clients do the same. Do not struggle with the changes in the industry; work with them. Know that they are a fact of the market and then design some solutions to help your clients through those changes when it comes to selling or leasing property today.
- New properties coming on the market will command more interest than older properties. For that very reason you must watch the other property developments that are coming up. Prices and rents offered will change the ‘game plan’ when it comes to existing properties today.
- Property enquiry will change during the year between the factors of property type, value, rent, time on market, and improvements. Every listing should be matched into the prevailing market conditions.
- Selling and leasing commercial and retail property can be quite seasonal. For this reason you can pick the best marketing solutions for the time of year. Marketing of commercial and retail property today is quite important; the tools that we have available are diverse and powerful. Choose the right tools to capture and grow the property enquiry. Drop the generic marketing campaigns. Be specific in how you promote your listings and make every marketing effort count.
So, all of this says that we should make sure at the very start of our services that we correctly guide and assist the clients that we work with. When you list at the right price, your chances of better enquiry and eventual sale are much higher. The client wants help in moving their property. Tell them how you can help them do that and give solid proof as to the prevailing market conditions. Give them the confidence and the reasons to use you as the preferred agent to take the listing on.
When it comes to listing a commercial or retail property, the comparable market analysis that you give to the client is critical to the conditioning process. Many clients initially expect far too much money for their property based on false information and assumptions.
In raising this issue it should also be said that some agents will deliberately overstate the value or rental for a property for the simple opportunity of getting the listing. After that point in time they will start conditioning the client to the prevailing market conditions. That of course is not the professional way to do business. It also sends the wrong message to the client and puts them under tremendous pressure when it comes to the final negotiation and transaction.
The fact of the matter is that you should fully brief the clients that you work with. You should give them accurate and up to date market analysis information. Here are some facts relating to that strategy and process.
- The information that you provide is time sensitive. The market today will be a lot different than what it was six months ago. Nothing ever goes up forever. The client needs to understand that commercial real estate is quite seasonal, and the enquiry rates change throughout the year.
- Local properties will have a direct impact on each other when it comes to property marketing and property enquiry. The properties that are still unsold on the market are not a good indicator of the final price. In most cases, those properties will be overstated or poorly marketed. Either way the information relating to those properties needs to be sanitized to something that is compatible to your property listing.
- Enquiry rates will change throughout the year. Property enquiry is usually shaped from the prevailing business community, and the economic circumstances of the market. Track the enquiry and understand what people are looking for today.
- It is quite likely that the time between property inspection and property offer will be lengthy. In many circumstances, the extraction of an offer from the potential buyer will take a lot of time and effort. They will be looking at many other properties and considering the business pressures that apply to borrowing money in today’s market. For this very reason, your client needs to be flexible and patient.
- Today’s market conditions will be influenced by the local area, the property improvements, and the supply and demand when it comes to particular property types. Tracking all of those numbers can be a challenge, however it does have to occur if you are going to give accurate and up to date market analysis.
Know your market and provide the best information to your clients. A well listed property will create more enquiries and sell faster in any market.
When it comes to pitching for the commercial real estate listing, you really do need to have up to date information about the prevailing market conditions. In only this way can you shape the thinking of the client to create a marketable property.
Most commercial real estate listing opportunities today are quite competitive. Other agents will be attempting to influence the thinking and decision facilities of the client. Enticements such as marketing and commission discounts are quite common. The fact of the matter is that any discount provided to the client is a false economy. They really want results, and discounts do not generally provide the right results. You need to show them that fact.
Agents that provide discounts are driven from a different motivation, and are less likely to have the client as a high priority in their business and marketing effort.
What’s Your Value and Commitment?
One of the targets in your sales pitch or presentation for the listing should be to show the client real value and commitment when it comes to shortening their time on market, and achieving a positive outcome.
Top agents do not discount their services given that they are property experts, and they sell their expertise effectively and directly. Most clients do not want to be an ‘experiment’ in property marketing. They want the best people with the best strategy and the right level of confidence to take the listing forward. That is how you sell yourself.
So how can you put all of this information together? Here are some tips that can be applied to your presentation or pitch for the listing.
- Give the client some solid information about the local area when it comes to time on market, prices, and competing properties. These facts will be quite specific to the property type and the subject listing. Given that the existing property market can be quite difficult at the moment, show the trends and shifts in the market through some form of graphical display. The last two or three years will provide some industry trends that the client cannot refute. Evidence is everything when it comes to listing the property.
- Show the client that you really understand the property type in every respect. Give them some history of other properties that you have worked on that are similar. Tell them of the strategies that were adopted when it came to marketing, inspections, and negotiations.
- The improvements in the existing property listing will attract a particular target audience. Defining the target audience to the client will help the listing process. Tell the client how you will be attracting the enquiry from the recommended marketing processes.
- Feedback is everything in this property market today. Most listings will only generate a small amount of enquiry and the agents will have to convert the enquiry as quickly and effectively as possible. This means that the client should be conditioned and prepared for true market conditions as you see them today. If the property market is slower or difficult, then the client needs to understand that fact.
- When you look at your local property area and territory, there will be some properties that sell or lease more effectively than others. Determine the criteria that will create that positive result. Show the client how their property will need to fit inside the criteria.
- Every property will have a preferred method of marketing and a preferred method of sale. The same principle applies when it comes to leasing. Solid recommendations need to be made to the client so that they do not make any mistakes when it comes to those factors.
- Make sure that the method of marketing is correct for the property type and the location. You should get vendor paid marketing funds as part of the process. Also focus on the exclusive listing process so that you have the commitment of the client to a lengthy period of time on the agency appointment, and your preferred marketing campaign.
- If you are the best agent in the local area, they will not hesitate in giving you an exclusive listing. Sell your expertise and relevance to the property and to the client at every opportunity. That will be key part of your sales pitch and presentation.
- Tell the client how you will be inspecting the property with any enquiring parties. Give the client a distinct strategy relating to the inspection and the improvements on the property. Tell the client how you will be featuring certain aspects of the property to influence the inspecting party.
- Lastly it should be said that every client should be prepared for the potential negotiation that should follow as a direct result of the right property marketing. Give them the complete facts relating to the local area and the local market so that the future negotiation will be supported by that conditioning process.
Pitching and presenting for a commercial or retail property listing does not have to be hard or difficult; it just needs to be based on facts. Sell your services based on facts.