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Commercial Real Estate Brokers – Why You Should Learn From Mistakes

In commercial real estate brokerage you will make plenty of mistakes on the road to progress. In sales, leasing, and property management, there will be issues, challenges and mistakes.  Every day there will be issues to work through and potential diversions to disrupt your efforts.

Let’s face it; the industry can be complex and competitive.  You will not win every client or listing that you chase, although you should win more times than you lose.  There will be challenges in your career and sometimes you will make the wrong choices (or no choices at all).  The key message here in commercial real estate is that you can learn a lot from your mistakes and the mistakes of others.  You can make adjustments to your efforts; that is how you progress.

A Real Broker Mistake

Let’s take a broker story as a case in point.  You will learn from this story just how easy it is to divert and take the wrong directions in our industry.

This is a 2014 story of real ‘mistakes’ of a real estate person working an inner capital city suburb in industrial property sales and leasing.  Here are the facts of the market to set the scene:

  • The sales and leasing season for a calendar year in the location was typically mid-February to late November in each year. That means most listing business generated could be derived during that time.  The property market always declined significantly between December and early February.
  • Around the change of financial year in June to July, things usually slowed for a few weeks in both business and investment. After that time the activity ramped up again for the balance of the year.
  • In the location things were generally active and ordinary. In other words the sales and leasing deals could be completed with specific brokerage and agent effort.  Some businesses and investors generally were looking to move or invest, so there were things that could be achieved locally.  The opportunities were there for those brokers and agents that could focus on prospecting, and stay on task.

So let’s look at the story about this agent.  For the purpose of the story I will call the person ‘Rex’ (name changed for obvious reasons).  Here are some facts about ‘Rex’ and what happened to him in 2014.

  • Rex is not what I would call a highly experienced agent. He still has a lot to learn about commercial, industrial, and retail property.  He had graduated into the commercial segment following many years in residential.  He did what most real estate people in such situations do; he had started to work industrial segment given that it is not overly complex and yet it is reasonably active as a segment.
  • After a couple of very slow years trying to make things work, he changed brokerage again and started a new location. He had a good start to the year between March and July 2014 due primarily to his prospecting activities including growing his market share in a particular location.  He had learnt how to prospect and had taken steps to deliberately grow his market share through database creation and direct marketing.  He was talking to a lot of people in a regular and ongoing way.  Soon his database was growing and enquiries were coming in.
  • Before I go too far here, I will go back to the point that Rex still had a lot to learn about certain market segments and property types. Commercial real estate is like that; there are many things to learn, and personal experience will usually be the only way to achieve the learning curve and local knowledge.  So Rex was still an ‘ordinary’ agent learning about the commercial, industrial, and retail segments.
  • In early 2104 his prospecting activities had created some positive results. Given that personal level of success and momentum, he had converted a few good investment listings in a location where investors liked to purchase property.  He took his new listings to the market using the auction method of sale.  It was the middle of 2014, and the right time to do property auctions.
  • So the auction campaigns started. He had created some reasonable levels of enquiry from each campaign given that he had a few good listings to market in a comprehensive way (quality listings will always create that marketing advantage when it comes to property enquiry).
  • Whilst the auction campaigns were underway, Rex did very little direct prospecting and new business generation. He simply focused on his new listings (that was a bad move).
  • So back on the listings he had, whilst there were not a lot of buyers active on each property at that time, there were still a few good and interested buyers, and that was really all that was required to get the listings locked away on successful contracts.
  • He had sufficient enquiry to convert and close on the sales of all three listings at around two million dollars each in sale price. Rex had achieved a reasonable level of personal income through commissions.  It should be said that this was the first reasonable income Rex had achieved for quite some years and that income was only as a direct result of his prospecting and personal effort.
  • With the commissions created, Rex started (falsely) to think that he was a ‘top agent’ and the ‘go to man’ for the location (this type of self-belief can be a real problem, and in this case was). After his recent sales, he took a short break from the business with a brief holiday, and forgot about prospecting entirely for the rest of the year.  This was in September 2014.  Essentially he did not prospect for new business between September and Christmas in that year; he was still living off the enjoyment of his recent sale commissions.  His ‘ego and attitude’ were however still quite high at the end of 2014. That is what you call a ‘false belief’ leading to ‘real shortcomings’.
  • When January 2015 arrived, Rex had no listing momentum and flow, no new stock, and no commissions in the pipeline. This is where the problems started to occur.  He was running out of money and had no momentum in the marketplace.  He was starting to consider family and lifestyle problems that would soon evolve.
  • To cut a long story short, at the start of 2105 Rex knew that he had to find another segment of the property market in which to start afresh. Whilst he still had plenty of self-belief, he had little self-process; he had to start rebuilding his momentum, career and market share.  He had let himself down when it comes to property activity, diligence, focus, and action.

When you look at the facts from the story, Rex knew exactly what to do, but consistently failed to take the required action.  His inflated ‘ego’ from the July sales in 2014 had shifted his focus away from the things that matter (prospecting).  The market soon moved away from him and the good listings went elsewhere.  There are always plenty of competing agents ready to take up on the mistakes of others and that was exactly what happened to Rex.

The moral of the story

This is a real story from the property market (Rex is not the person’s real name).  We can learn from this.

We will all make mistakes in the industry, and Rex is not unique or special.  He failed to see what was happening and then failed to do something about it.  He should have adjusted his focus and activities earlier rather than later.  He should have kept his ‘ego’ in check.  Confidence is a good thing; ‘ego’ is not.  Develop plenty of confidence in our industry from the deals that you dot, but keep the ‘ego’ out of the equation as it will not attract the clients or transactions.

There will always be ‘peaks and valleys’ in our business.  When you are at the top of your game, still focus on the small things and the important things.  Build your confidence.

Commercial real estate is an industry where the rewards are large and generous for those that take correct actions in a regular and ongoing way.  We should all learn from our mistakes and adjust our actions accordingly.  Look for the mistakes and resolve them.  We can all learn something from Rex.

This year

So let’s fast track the full six months now to the middle of 2015.  Rex is still struggling in the marketplace to gain any traction and listing activity of consequence; he is not a prospecting directly, logically, and effectively into the location.  He is losing ground.

He is now trying to take any shortcuts possible.  He has become desperate and disorganised.  He has failed to understand that he was and still is the problem to his current situation.  Unless he changes his personal actions and focus, nothing will improve.  It is quite likely that Rex will soon be slipping out of the industry.

The central message

There is one fundamental message that flows from the story.  You can learn from the mistakes of others in the industry, and you can also learn from your own mistakes.  The important thing here is that you do quickly see where the mistakes are happening, you learn from them, and you adjust your efforts specifically and consistently.  Make the adjustments sooner rather than later and track your progress.  That is how you can succeed in commercial real estate brokerage.

You can get more tips and ideas to help with commercial real estate brokerage in our eCourse ‘Snapshot’ right here.

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Overcoming Road Blocks and Frustrations in Commercial Real Estate Brokerage

As an agent or broker in commercial real estate, you will have pressures and diversions when it comes to establishing your career and growing market share. Plenty of challenges will arise through daily business activities and when it comes to finding new clients to work with and for over time.

 

The top agents of the industry focus specifically on finding new clients and the needs that clients may have when it comes to property sales, leasing, and property management. That’s when the database becomes an essential part of their business.

 

When the property market appears to be slowing, it can usually be due to a simple change in seasonal activity, or a business adjustment due to economic pressures. There will always be plenty of listings to attract despite property market changes.

 

If you focus on high quality listings, the process of business generation is a lot easier. When you take a high quality listing to the market, the levels of enquiry are significantly greater, and the time on market factors are lower. It directly follows that you can grow your market share a lot faster when you focus on quality listings.

 

Ways to Build Your Commercial Real Estate Market Share

 

So the question arises as to how you can create and attract high quality listings as part of your personal market share. The answer is relatively simple and can be summarised in the following way:

  • Build Your Skills – Practice your listing pitch and presentation frequently with relevance to the local area and the current levels of enquiry.
  • Know the market – Understand exactly what tenants and buyers looking for when it comes to the property type and the location. Use those factors when it comes to pitching and presenting for a listing. Show the clients that you work for how their property can be matched into the current levels of enquiry.
  • Ratios and Results – Track and measure the types of enquiry coming in when it relates to your location. Build your marketing programs around the factors of attraction from incoming enquiry.
  • Be Selective – Avoid taking open listings as they will generally waste your time. When you can’t control the client, the enquiry, or the negotiation, things become difficult. For that reason focus your efforts around exclusive listings.
  • Vendor Marketing Funds – Support every exclusive listing with vendor paid marketing. Use that vendor paid marketing to structure high quality promotional campaigns in the local area. You will soon be known as the agent of dominance and professional marketing skill.
  • Referrals and Leads – Ask for referral business and opportunities with all the clients of the prospects that you work with. There will always be leads to be actioned through the referral process.
  • Success Letters – Any and all successful transactions should be communicated back into the local area through direct marketing and success letters. Tell all of the local property investors and business owners of your recent successes when it comes to sales, and leasing.
  • Talk to Many – Any sale or leasing transaction will give you a real reason to talk about property management services. Over time you can convert property management business and grow the portfolio for your brokerage. In that way you will control the listing stock into the future and provide the brokerage with a further source of listings as the property owners or investors change their investments stock.
  • Previous Clients – Review the sales and leasing records for the brokerage over the last five years. Revisit the clients and prospects that have been part of any transaction during that time.
  • Watch Other Agents – Track and measure the activities of other brokers in the local precinct. When another agent puts signboard on a property, it is an excuse to talk to the surrounding owners.

 

The commercial real estate business is not complicated but it is specific and requires a systematic approach. As an agent or broker, these simple facts provided will help you get traction in your market and build a list of leads and opportunities with the local property owners.

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How You Can Amount to Something in Commercial Real Estate Brokerage

When you work in commercial real estate brokerage today, you have quite a few choices when it comes to your establishing your career as an agent.  You can be like most other agents and take what comes along in clients and property listings, or you can strive to build a great real estate business.  Important choices must be made from the very start of any real estate career.

If you want to amount to ‘something significant’ in your time in the industry, then you will need a plan and a process to move ahead.   Luck only has a small role to play in where you will head as a specialist property agent.  In fact, if you rely on ‘luck’ to get you somewhere, then the industry can be very unforgiving, difficult and slow.

Depending on your speciality in the local area, your property focus will be on a variation or combination of the following:

  • Investment sales
  • Investment leasing
  • Project sales and or leasing
  • Property development
  • Vacant land
  • Tenant advocacy
  • Buyers agent
  • Property management
  • Retail management and leasing

Many will ask about what category is better from a career perspective.  The reality is that they are all quite good for both listings and commissions; that is on the understanding that you get back in results what you put in by way of effort.  That is why a plan of approach is really important for all brokers and agents.

Here are some tips to help you shift up a gear and get some real momentum in your commercial real estate brokerage and territory.  You can add to the list based on your location and property type.

  1. Existing listings – You can and should work with your existing listings to achieve better results.  Condition the clients that you are working with today to the prevailing market conditions and the current levels of enquiry.  An existing listing can be repackaged, refreshed, and marketed differently.  It is a matter of understanding the focus of the client and helping them see the correct adjustments to move ahead.
  2. Track and measure – Any quality listing should be tracked and measured when it comes to current levels of enquiry and inspections.  If you are not getting the results you require, then refresh and repackage the listing for better results.  Don’t wait too long in your marketing process to tell the client that he or she has a problem; a listing can  become stale quite soon, so help the client with marketing facts and decisions.
  3. Other Agents listings – Look at the other agent’s listings in your local area; assess the time on market in each case.  You can use those listings as valid reasons to talk to other investors and property owners in the area.  It is quite possible that other local property owners would like to compete with nearby listings held with other agencies.  You can offer them that facility and then package their property with great care and attention to the current levels of enquiry locally.
  4. Signboard Activity – Through your area or listing territory, monitor the number of signboards for each agency and within each property type; you can do that on a weekly or fortnightly basis.  Differentiate between open listings and exclusive listings in tracking the numbers.  Look at the time on market in each case and determine the best methods of sale or lease for today’s property conditions.  As a general rule, every quality listing and exclusive listing should have a special signboard designed and erected as part of the marketing campaign.  A good signboard will help with the local market enquiry and the levels of inspections generated early in the campaign.
  5. Internet listings – Track the number of Internet listings for your area and do so by property type.  In doing that you can identify the methods of online marketing that seem to be more effective than others.  You can also track the time on market for each listing with a particular focus on exclusivity.

These four simple things will get you into the local real estate market with greater focus and direction.  Soon you will see the clients and the properties creating the best levels of interest; that can help and boost your career as a commercial real estate agent.  You can learn a lot by watching the activities of other top agents and the quality listings available today in your town or city.

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Use Your Strengths in Commercial Real Estate Agency to Advantage

In commercial real estate agency you will find that you will constantly be up against many agents in the presentation and pitch process.  The question is can you present and pitch your services for a listing at a better level or in a better way than your competitors?  Can you show why you are the better agent for the job?

Sure, things are competitive in our industry but with a little self-development you can expand your strengths and make them even stronger for any sales pitch you make on a listing.  When you know that you are a ‘top agent’ and that you have all the relevant skills that a client or the property requires, then you can convert more listings.  Confidence will get you ‘across the line’ when it comes to your pitching and presenting.

Here are some tips to help you with your presentation and client connection processes today.  See how these things match your current skills and approach to attracting more listings.

  1. Know what you are good at when it comes to selling, leasing, or managing commercial property.  Build that relevance into your presentation with stories that attract the attention from the client.  Most clients like to know that they are not the only ones struggling with sales and leasing challenges.  Show them the solutions as you see them.  Give them the ideas of just how they can fast track the marketing and results process given the prevailing market conditions.  Put yourself into the property marketing and promotional process; if the client then wants to get the results as you see them, they will need you to do that.  Top agents sell themselves very well.
  2. Find out what people are looking for in solving their current property challenge.  Ask them questions about what they have done to date in marketing the property in case you are taking on something that has been taken to the market unsuccessfully before.
  3. Review the skills of the competition so you understand what the competitors will be saying in their presentation to the client.  How can you be better than the others that the client may be meeting?
  4. Start practicing on your good skills so they get even better.  Every day when you first arise, read a business or sales related book aloud for some 20 minutes or so; it helps you with verbal flexibility and confidence that is just so important in our industry.  Just about everything that you do and negotiate on in property sales and leasing will hinge on your ability to communicate.  The words that you use and the way you deliver them will be strengthened by this voice practice process.

Are you ready to win new commercial real estate clients and listings?  Now is the time to build on your strengths as part of starting that process.