In commercial real estate you need seller paid marketing funds to spread the word about the property and its upcoming sale. Without that marketing approach, it can be very hard to get the message around the industry about the pending sale and the suitability of the property to the target audience.
If the client will not contribute towards property promotion, you have to ask yourself whether the listing is worth having. Think about all those other exclusive listings that you have where the clients have already spent good money on marketing. Shouldn’t you spend more time on those listings?
Some agents will decline an exclusive listing without vendor paid funds and I tend to agree with the practice. If you have a motivated client then you have something to work with and promote. Marketing funds helps reach out to the right buyers of the listing.
Here are some principles behind the process of vendor or seller paid marketing:
- Get the advertising money upfront before you spend time and effort in the campaign. Don’t start the campaign without funds in bank. Many a client has stalled on paying marketing funds later on, especially when buyers are hard to find or if inspections are slow to create.
- When it comes to advertising on the industry portals or websites, ensure that the client is prepared to pay for premium placement or elite type listings online. Given that there are plenty of local listings on the market at any point in time, your quality property has to stand out above others.
- Your brokerage is likely to have a website for the promotion of listings in addition to the industry portals. Develop a ‘premium strategy’ for quality listings where they feature on your home page for a number of days. The client should pay for this extra service on your website.
- Every exclusive listing should be promoted in your email newsletter. Those newsletters should be going out to the market every 7 or 14 days and should be property type or zone specific. You can charge a special rate for this despatch. If you have a large database, you could charge $150 per email database send. To sell the concept to your clients show them the size of your database and its relevance to the listing. Show them the shortlist of people you have already identified as potential buyers.
- Let’s assume you have an exclusive listing; that listing should be the subject of 3 or 4 different types of advertisements all separately worded to minimise repetition. You can also use a selection of professional photographs to attract the eye of the reader.
- To help sell the concept of seller paid marketing funds, tell the client exactly how you will be personally contacting directly the property owners and the business proprietors locally. Most agents won’t leave the desk to promote a property locally. That is an amazing opportunity for those that do. Physically take your quality exclusive listing to the surrounding property owners and business leaders.
- Communicate continually. When the client has spent good money on marketing, it is up to you to tell the client every 2 or 3 days how things are going in promoting the listing. Give them plenty of feedback on website hits, email click throughs, and direct call enquiries. If you take an inspection at the property, tell the client what you found in the inspection.
You could say that this is not ‘rocket science’ and that most agents should do these things. The fact of the matter is that most agents do not market a listing specifically. Those that do however reap the benefits of better inbound enquiries and commission opportunities.
In commercial real estate there are unlimited opportunities for real estate agents to earn good income and grow market share. In saying that, the results achieved are all driven by personal effort.
There are 3 separate skill bases or services to the market and each are quite specialised. Decide what you like do and what will give you the most reward (physical and financial). There is no point in attempting to do something that you do not understand or like; that will be too personally restricting.
So the 3 skill bases are:
- Commercial and investment property sales
- Investment property leasing
- Commercial and retail property management
Some agents will choose to work on both sales and leasing. That is a good thing as the skill bases are similar and they are linked when it comes to working with clients. A leasing client today is likely to be a sale or purchase client in the future.
The skills required to be a property manager are a bit different, and the long term target when working with property management clients is that of providing professional service, and not just a single deal (as in sales and leasing). Property managers for that reason are ‘deal oriented’ but ‘service strong’. Building relationships over the long term is really what professional property management is all about.
If you have chosen commercial real estate as a career for yourself, then understand your character and its best ‘fit’ for the tasks at hand. You can work in any or all of these 3 segments or sections of the market within your agency. Choose the section of the industry that is best for your skills, knowledge and business style.
To move ahead in our industry it is best to prepare a set of goals and a small personal business plan. That strategy will help you with progress and adjustment during the year. Here are some more tips to strengthen your push and direction as a real estate agent:
- Motivation – You may have heard a lot about motivation and its requirement in any career. In our industry it is a very personal thing. Self-belief is a good thing, but action taking is far more important. Every day you will need to do specific things that can be a challenge. On that basis your levels of personal motivation must be significant; no other person can make things happen for you.
- Goals and targets – When you know the section of the market that you are working in together with your location, your goals can be set based on not just the personal performance that you are capable of, but also the ability of the market to give you opportunities. It directly follows that you will need to know your market and its growth factors and possibilities. Research is required to understand the history of local sales, leasing, and property management (depending on your skill base). Make sure that your town or city has the growth possibilities that you are looking for at a personal level. Ensure that you know how you will be tapping into those possibilities.
- Putting your plan in motion – As with any plan certain actions will be required. Every day you will be required to focus on new business, new people, and new properties. That is in addition to everything else that happens with current clients and properties. The most successful people in our industry are those that spend a good part of every day focusing on prospecting for new business. From the earliest stages of your career, set this rule in motion. Watch how results come back to you and track your results. Make adjustments in your prospecting and cold calling so you are growing your business in any property market and at any time.
These three factors are perhaps the most important to help you get traction and market share as a broker or agent. Look at what you are doing today and make adjustments where necessary. Strive to improve on a daily basis in commercial real estate agency.
When it comes to gaining new clients and listings within commercial real estate brokerage, every new client should receive a direct telephone call from the sales manager or the principal of the brokerage as soon as the listing is signed up. In this way the client will understand the value that you place on them when it comes to providing professional service, feedback, and growing the client relationship for the long term.
In simple terms as the team leader of the business you can congratulate the client for using the services of your agency and to encourage them to connect if any problems develop. This then allows for the differences in agent performance and gives real control when it comes to client service. The team leader can monitor the client relationship so that the clients business is preserved and encouraged in a positive way.
Spending more time on the client relationship at the ‘front end’ reaps the rewards later when it comes to client conditioning and any negotiation that may be required when it comes to any sale or leasing situation.
Here are some ideas to help you connect with the client professionally at the start of and throughout the property marketing campaign:
- As soon as the listing has been agreed to and signed, the sales manager or agency principal should make the phone call direct to the client thanking them for the business and encouraging ongoing communication if required.
- Depending on the size of your team and your business it can be valuable for the team leader to meet the client in the first week of the property campaign. The face to face connection is valuable when and if things become difficult in moving the property to a sale or a lease.
- At least once a month the team leader can communicate again with the client as part of the maintaining the connection process. Some listings will stay on the books for a very long time for any number of reasons and on that basis this connection will help preserve the focus of the client and to encourage them to remain positive in the protracted marketing or negotiation process.
- Providing the client has given you an exclusive listing for the property then the levels of service to be provided should include regular reporting of campaign and negotiation progress by the telephone, in emails, and by summary at the end of each week.
Within larger agencies the client experience will vary from agent to agent for any number of reasons; make sure you know the agents that are not good with client service and communication and take steps to intervene where necessary.
The team leader can be a ‘standard’ to hold the client experience at a level of control and allow positive feedback. If the individual agent ‘under performs’ then the team leader will soon know about it and take steps to fix it.
When you work in commercial real estate brokerage you need plenty of quality listings, and then a buyer management system to support and encourage offers and sale contracts. If you choose the right listings, enquiries should come your way; every enquiry is an opportunity for the future and that is why the process should be well managed.
As a special note here, exclusive listings help you control buyers; open listings by contrast give you little control over the property, the client, and the buyer enquiry. So your primary focus should always be to attract and convert exclusive listings that you control as an agent or broker; if the listings are of quality, then you should have a good ongoing source of enquiry. That is where your database becomes really important, but more on that later.
Here are some buyer management ideas:
- Buyers are sometimes ‘liars’ (or selective information providers), and on that basis should be fully qualified before you do too much with them. Understand exactly who they are (including contact detail), what they want by way of property, how they have found you, and question deeply their ability to act on a property purchase. All of this has to happen before you do anything else. Expect the buyer to limit or manipulate the information they give you; careful questioning should solve that problem and get to the real facts.
- Have they seen other property locally? If they are working with other agents and are considering other property to purchase it is best to know about it up front. That is why ‘exclusive listings’ are so important; you control the listing stock and so any inspections are yours to create and control.
- What do they know about the local property market? That information is part of the qualification process. See what they know about competing properties, prices, and methods of property purchase (see what purchase method suits them the best).
- Are they a ‘hot buyer’? By ‘hot buyer’ I mean someone that has the ability to act and is motivated in some way to take immediate action. Find out what time frames they have to satisfy the property need as well as the critical ‘must have’ factors in property location, improvements, and property type. If they are ready to act on a purchase then they should rise to the top of the enquiry list, and a full review of your available listings should occur.
- Don’t show them too many properties at any one time; 3 or 4 are usually enough in any one property sitting. Too many properties inspected at one time will usually frustrate the buyer decision and deal momentum.
When you understand these things you can put some urgency into the property selection, inspection, and purchase process. That’s how you work with buyers of commercial property today.
In commercial real estate brokerage today the negotiations required for some properties can be complex and protracted. On that basis you should have an established negotiation management process to use at a personal level or within your real estate office. The process helps you and also the team leader or sales manager to understand the status of the current deals and the commission opportunities.
It is a sad fact that some agents are less experienced when it comes to complex property negotiations. On that basis the negotiation tracker can assist in deal momentum and closure. The sales manager or team leader can then closely monitor the stages of the deal and potentially get involved if closure is taking too long.
Here are some strategies to help you with a ‘negotiation deal’ tracker:
- The tracker itself should apply to the separate stages of activity in both sales and leasing. This then suggests that you will have a checklist specifically designed for property sales and another for property leasing. If you get involved with retail leasing, the complexity of that will also require a specific checklist.
- This process can help maintain control across deals and agents when the market is busy or the property is challenging. The levels of experience between agents can sometimes expose a brokerage to liability and indemnity risks. The checklist can help you from an insurance and risk management control perspective.
- A rule needs to be set that all deals will be documented in and processed through the negotiation checklist for the office. At the end of every working day the checklist should be updated by each agent for the deal and the client in question. In this way the sales manager can oversee the momentum of the negotiation and help with any hurdles that may be occurring.
- As a general concept, any negotiations should be soft on people but hard on the issue; don’t bring personalities into a negotiation, but focus on the issue.
- Every sale or lease negotiation will have documentary requirements to legally protect the client as they move to contract and on to settlement. Some agents will have a weakness when it comes to documentation; accuracy and knowledge are a challenge for some. The checklist can help identify those weaknesses and control the actions of individual agents. Again, this is beneficial from an insurance and risk perspective.
- A good negotiation should be a satisfactory outcome for all parties (including the agent on behalf of their client). The momentum to the process will be established through a sense of urgency and the professional skills of the agent.
In many respects you can improve an agent’s negotiation skills through ongoing training and role playing when it comes to selling or leasing the various property types. In any market and at any point in time there will be common problems of negotiation that pop up and require action; the weekly sales meeting is the best place to talk about them. In our industry you never really stop learning.
Closing the gap on any property negotiation should be the target in any property sale or lease scenario. Design a checklist involving the factors to achieve that control and directed momentum. The client will appreciate the professionalism, and over time that will help you with other business opportunities and referrals.