Many people think that the life of a commercial real estate broker is easy. Perhaps some people even join the industry assuming that is the case. The reality of the industry is far and away from those assumptions. The top agents in the market work really hard and do so to a definite plan or system.
When you put in the effort individually, you will get results. The efforts applied should be specific to the property type and the location; in other words you do need to do the right things each and every day and systemise the process. That is exactly what the top agents do.
Here are some cold hard facts regards the industry:
- Commissions – looked at in isolation, the commissions that we earn can be quite large. For most property transactions and listings however real strategy and effort is required to attract a successful outcome in any sale or lease. As large as the commissions may seem, they don’t come easily. If you want significant income, you need to work hard.
- Hours of work – the hours of work are variable and sometimes quite long. It is not unusual to be negotiating a contract or a lease later into the evening, across the weekend, or early one morning. The business is out there to be done providing you are flexible enough to do the work of any time of day.
- Property knowledge – property knowledge will have a big impact on your inspections and negotiations. It will also help you significantly when it comes to the listing process. On that basis you will really need to know a lot about the local area, the property type, and the current levels of enquiry.
- Personal marketing – whilst you may work for a well-known brokerage or agency, you must market yourself each and every day to the right people in the right way. On that basis every agent or broker should have a specific prospecting and networking program underway.
- Prospecting – it should be said quite clearly that prospecting is not easy. It is required business skill that takes practice and improvement. Simply lifting the telephone or door knocking on the business will not be very successful without the necessary practice factors. Build some prospecting practice into your business day prior to getting into the office.
- Negotiation – negotiation skills are something you learn over time. Every landlord, seller, buyer, and tenant will have different factors of leverage and requirements when it comes to property negotiation. As the agent or the broker to the deal, your advantage will be in seeing those factors of leverage and the requirements that can be satisfied. That is how a good negotiator works.
- Inspection – the inspection of a property will happen for a number of reasons and preparation is required. Every listing will have strengths and weaknesses impacting the inspection process. Your job is to use them or work through them to achieve the best result. That is where property knowledge and local market information will be of high value.
- Documentation – some property lease and sales situations are very complex. Expert information and assistance will be required when it comes to complex transactions. Make sure that every contract or lease that you create is correctly designed for the property and the client’s situation.
- Database – your database will be the most important business tool that you have available. Spend time every day connecting with people within the database and adding new people to the process. Over time the database will give you plenty of leads, and referral opportunities. From the database you can create a specialised list of VIP clients and prospects.
Looking at all of these things, you can see how important the commitment and the skills of the agent will be to their progress in the industry. They say that nothing really comes easy; certainly that is the case in commercial real estate brokerage. Be prepared to put in the hours and improve your skills over time. That is how you can be a very successful agent in the industry.
In commercial real estate today many agents will say that the property market has changed, and indeed it has. The fact of the matter is that it is always changing and we as agents must live with that change. If we want to earn good commissions and find more listings, we have to use that property market change change and do something productive with it.
In any working year and selling season you will find common fluctuations in all of the following:
- Lack of tenants to fill the existing vacancies
- Slow deals and decisions when it comes to property sales or leases
- Lack of buyers coming to you from the marketing efforts and advertising
- No developments coming up to put more space into the market
- High vacancy factors in existing properties
- Low grade stock and nothing of quality available to rent or buy
- Too many properties on the market in either sales or leasing
The real issue here is that these things happen all the time. If any of these things are frustrating you now in your commercial real estate agency, then have a good look at your prospecting efforts and just how many people you talk to every day. It is quite likely that you have a poor or non-existent prospecting model.
Most agents that struggle with the changes in the property market are those that do not have a solid database of qualified prospects and contacts. Those agents live from day to day on the results that they get from ever new listing and the advertising that follows. They lack new people and established contacts to talk to. They generally have not created the pipeline of contact that is so important in our industry.
It is a fact that the cycle of property activity in commercial real estate is quite long. It can be months if not years for some of our prospects to take action or deal with a property matter. Your success in the industry will be strengthened by the number of people that you know and the frequency of direct contact that you make with them.
When you look at a list like that mentioned above, you can turn every market ‘negative’ into a ‘positive’. For example:
- You can specialize in finding tenants when they are few and not overly active.
- You can improve your negotiation and marketing skills to put urgency into the average property transaction.
- You can get to know lots of local business owners and property investors so you have people to talk to when a quality listing comes onto the market.
- You can become a specialist in selling or leasing a good property ‘off market’ when other agents are struggling with the traditional way of finding buyers and tenants.
You can turn every negative market situation into a positive one if you work at it as a specialized commercial real estate agent.
In today’s marketplace the Real Estate Agent needs to be technologically supported as both an individual and an office. Good database software is the only way to support ongoing customer relationship management and control your accounting processes.
Whether your office is focusing on property Sales, Leasing, or Property Management, you will need database software to support your activities. If you diversify further into the disciplines of business sales or commercial, the needs of your database software will need to be further enhanced to satisfy the unique conditions and activities of those transaction types.
Before we go further with this topic, we will say that you need to be very comfortable with using computers as regular business tools for your business today. The more that you do this and the more effective you are at it will be critical to your future real estate success.
So what Database is Best?
Essentially there is an array of database software alternatives available. These can be generally acquired through retail outlets or by purchasing online. Most of these generically available products are very good software packages but have not been specially shaped for the Real Estate industry.
This then means that you must spend some time on the software to shape it to your particular needs. In most cases this will not be a problem for the person familiar with software technology and computers. If however this is an issue for you, then you’ll need to seek expert assistance from a consultant to install and shape the software for you.
A good choice of software for your database will save you time and help you keep on top of the opportunities. This means more clients and commission.
You will need software that tracks the prospect and the series of interactions that you have had with them. The software will, at the most basic end of the usage spectrum, also need to:
- Mail merge to letters and emails
- Integrate with ‘Microsoft Outlook’ or your email client
- Integrate with your mobile phone synchronization
- Create diary recalls of critical issues and the next contact event
- Contact detail
- Property detail
- Recording of all correspondence
- Allow you to classify the prospect to the type of property they want or have, and their capabilities and needs in that regard
- Allow you to make notes of conversations and meetings with the person
- Flag urgent and critical issues of response or opportunity