In commercial real estate brokerage, you will have plenty of challenges when it comes to finding quality listings and good clients. In most locations, towns and cities, the competition is fierce when it comes to commercial real estate agents. On that basis you really do need to have an effective prospecting model to implement at an individual level.
It should be said that most brokers and agents don’t do this very well. On that basis the opportunities are significant if you can create and stick to a good prospecting model. Create a habit around prospecting.
Here are some proven and highly effective prospecting and networking tips when it comes to agents or brokers winning new clients in commercial real estate today. Compare these to your current strategies:
- Stick to a defined area when it comes to targeting properties and clients. On a street by street basis you can move through the region and research the necessary property ownership details and business proprietors. Don’t spread yourself too thinly when it comes to large areas and diverse property types. Specialization will help you with finding listings and growing property knowledge.
- Devote 3 hours per day to the prospecting process. The cold calling process should occur first thing every morning prior to any meetings or property inspections. Make a priority to get your cold calls done prior to 11 am. Your meetings and property inspections can occur after that time.
- Split your prospecting time into two distinct segments. The first segment will be those people that you have spoken to before. Regular contact here will allow you to tap into the opportunity when those people are ready to make a sale or a lease transaction. The second group that you should speak to will be those that are totally new to your database. Feed your database with fresh contacts and opportunities with new people.
- Track the results that you get from all of your prospecting activities. Understand how your ratios are improving between outbound calls, meetings created, presentations made, and listings converted.
- Understand the differences between open and exclusive listings. As a general priority, you should be targeting exclusive listings at every opportunity. On that basis, track the numbers of listings in each case. Show the client the differences in time on market when it comes to open listings and exclusive listings.
- Any property that is converted to a listing should be packaged for the current market conditions. As you get results and feedback from inspections, you can make clear recommendations to the client regards pricing and marketing. Over a period of weeks, the repackaging of a listing can increase inspection and negotiation opportunity.
So there are some very definite things that can be done to improve your listing conversions and commission opportunities. The secret to making all of this work is to create a personal system of prospecting that you stick to every day. Refine your activities to the current market conditions, and soon you will see the conversions you require.
What is the value that you bring as an agent to a client in commercial property today? It is an interesting question for a client to ask when it comes to an agent selling, leasing, or managing commercial real estate.
Most agents would say one or more of the following:
- We know what we are doing
- We have good people
- We understand the property market
- We have done some great deals recently
- We sold (or leased) other properties like this recently
- We know how to market the property
The sad fact of the matter is that when they have said these things, they go no further. They do not back up their claims with detailed proof.
If you say anything to a client about your relevance or skill as a local commercial real estate agent, be prepared to expand on the issue and talk about it comprehensively and directly. Show the client some proof of why your statement is so important to their property position or need.
Here are a couple of ideas to use when it comes to showing the client that you really are the right agent for the job of marketing the property:
- Use a Gantt chart that shows the steps that you will be taking in marketing the property and converting the result that they need. Have different Gantt charts for the process when it comes to sales, leasing, and property management (commercial or retail).
- Define the target market in such a way that you are clear on exactly how you will connect with the right people and help them understand the property market.
When you pitch or present to a client, don’t discount your services and lower your marketing fees for the sake of attracting the client’s attention. Offer real and relevant marketing solutions that are so good that the client cannot ignore you. Sign them up on an exclusive listing.
Are there dangerous clients in commercial real estate? Absolutely; yes is the answer. You will come across them all the time. You must protect yourself from these clients that are out to manipulate the deal for themselves without true transparency.
Ethics in our industry is really important. Poor quality clients can derail your listing integrity and commissions. So the message is that you should keep to the rules in the industry that protect your actions and listing activities. Clients that are less than honest can destroy your business in many different ways.
So here are some signs to look for when it comes to client selection and communication:
- Watch out for the clients that will not sign an agency appointment ‘until you find a buyer or tenant’. The request happens all the time in our industry but you cannot and should not act outside of the laws of commercial real estate agency in your location. You are bound to act legally and with integrity; if the client wants you to ‘bend the rules’, they are not a client to have and you simply cannot trust them. In those circumstances walk away from the deal or the listing. Let some other agent waste their own time and risk legal action. It is not fun when legal claims are made against you.
- Some clients work with many agents. Now this is just fine if all relationships are ethical and legal, but your listing and negotiation information should be protected by a valid appointment to act and an established client and agent relationship. If you suspect that the client is sharing your ‘market intelligence’ with other agents, you could have a problem.
- If your client avoids giving you an exclusive listing, it can be a sign that you really do not have their commitment and trust. They could also be working with many other agents at this very moment in trying to sell or lease the property. Ask the questions and get to the real facts of the matter.
- A reluctance to give you full access to the property or comprehensive property detail is a sign that something is going on. A similar problem is evident with the client not disclosing tenant and income detail for the property. If the client is not being open and honest, step back from the deal until you know all the facts. Get copy of all current property related documentation before you go to the market, negotiate, or talk to other people. Understand the facts that are before you.
- Failing to put things in writing can be a big problem in our industry. Many conversations across the telephone happen every day. Always keep your notes of client and customer conversations and instructions. Evidence the matter back to the other party in an email or similar written or electronic form.
Lastly something should be said regards confidentiality. Know who your client is and what their instructions are. Keep client agent discussions and instructions confidential. Disclosure of privileged information can get you into a lot of trouble.
In many respects, you as the local commercial real estate agent will have some geographical territory and property type in which you specialise. When you specialise, you can provide much more value to the client with comprehensive local market information. It also helps you greatly when it comes to pricing and marketing solutions. Here are some tips from our Agents Newsletter.
To help you here, you can create a property inspection report process to be used for many different reasons and client requirements. The report can become a checklist around which you can base your recommendations and marketing strategies.
Here are some categories that can be merged into your property inspection report. Add to the list based on your specialist property type. Also add the geographical factors that may have an impact on any listing.
- The ownership of the property will need to be completely checked against the information provided by the client. Make sure that you’re dealing with the right people and decision makers.
- Review the description of the property and the title. Check out any encumbrances and rights of way that may have some impact on the title, the tenants, and the property ownership.
- You will sometimes find that there are issues relating to neighbouring properties and the local precinct that are not detailed on the title. Boundaries are a good example of that situation. Ask the client for an update regards any current outstanding issues that need to be resolved prior to the commencement of any listing and or marketing. Take notes in this process given that the information can have significant impact on future negotiations, or leases, and contracts.
- If the property contains tenants, you will need to review the leases comprehensively. Each lease can have strengths and weaknesses that can apply to the income stream and the property ownership. When looking at a property with a number of leases and tenants, take the time to go through the tenancy mix report, the tenancy schedule, and the lease profiles. You will need original lease documentation to do that, and expect that the process will take many hours if not days.
- Review the services and amenities that apply to the property and the current condition. Add to that the details of property improvements, strengths and weaknesses, zoning, and rates and taxes. It is worthwhile checking that the permitted use of the asset complies with the local zoning and approved development plans.
- Review the income stream for the property both in gross rental, and net rental. Review the outgoings for the property that apply on an annual basis. Check those outgoings against similar properties in the same area today. You need to know that your property is competitive when it comes to gross and net income. The net income will have an impact on the potential price that you may achieve a sale.
- Ask questions about the history of the property and the improvements over time. The landlord, the tenants, and the neighbouring property owners will have some value in this process.
All of these things lead to a solid set of recommendations that can be made towards the property marketing program in today’s economic climate. All of these things will give you relevant ideas to help in the promotional marketing activity.
You can get more tips like this in your Agents Newsletter.
In commercial real estate today, there is no need to complicate the sales pitch or presentation for the listing. Keep things simple in all respects. That being said you still need a plan to get the message through.
Most property owners and investors want the clear facts and solid recommendations that can help them with the property challenge. That is why generic pitches are a total waste of time. A full 95% of the presentation should be about the property and the client as you know it. The other 5% can be about your business and the relevance you bring to the listing.
To create a presentation about the property at such a high level you really do need to know the local property market and the trends over recent time. You should also know the subject property and the strengths and weaknesses of the improvements and location as you see them.
Here is a summary of approach to plan your presentation. Given the property type and the needs of the client, structure your presentation around the base model of:
- Tell them briefly who you are and why you are there (only do this if they do not know much about you and keep it very short)
- Tell them about the facts that you will be covering and why (overview only)
- Give them the facts. Tell them about the key issues in clear and concise points (substantial and detailed information)
- Give them relevant recommendations and alternatives (people like to have choices) relating to the previous point.
- Tell them what you have told them and summarise it (short summary)
- Ask for the business (be prepared for the answers you could get!)
As you move through these stages the client will give you an indication of their focus and concerns through questions and comments. When you can see what they are concerned about you can open up on the relevant points. Local property market knowledge can help you here.
The best listing pitch today needs to take into account the challenges of the property market locally and then regionally. Understand the pressures that people are operating under and then adjust your skills and knowledge around those facts.
It takes time to list, promote, negotiate, and close on a commercial or retail property. The business owners and the property investors that we work with are quick to enquire but slow to make a decision. That is why you need to be at the top of your game to encourage the enquiry momentum and property transaction.
Most clients and prospects in commercial and retail real estate want to make a decision, but they will only do so when the right facts and strategies are provided to them. If you fail on a listing or sales pitch, it is because you have not fully aligned yourself and your pitch to the client or prospect; that is the simple fact.
The commercial property presentation today for sales and leasing has to be quite specific to the challenges in the property market. Every client that we present to should be under no misunderstanding when it comes to the prevailing market conditions. It is your job to tell them exactly how the market reacts at the moment to properties similar to that owned by the client.
The property sales pitch or presentation therefore needs to be comprehensive and specific to the property type. When you do this correctly, you will achieve a listing that is matched to the market and a client that is receptive to the required ongoing marketing and negotiations.
Here are some tips to help your property presentation process today.
- As a first stage of the client connection, it’s desirable to meet the client on site and go through the property together. This then allows you to ask questions of the client relating to the property history, the usage, and their motivations for sale or lease today.
- Following that property inspection, ask the client for at least 24 hours of time to allow you to research the prevailing market conditions, and provide the best recommendations to resolve their property challenge. Use that time to correctly structure the strategies and recommendations that should be put to the client. Be quite specific and not generic when it comes to those factors and your final proposal or recommendation.
- At the start of the actual presentation, explain to the client the prevailing market conditions as you see them relating to the property and it’s location. Provide evidence from competing properties on the market today as to time on market, pricing, and best methods of sale or lease as the case may be.
- Over the last two years, there should be some market evidence relating to the achieved prices and rentals for that property type. Whilst each property result will depend on improvements and location, it is worthwhile graphing the property market trends when it comes to results, prices, and rental. Make sure you have inspected each comparable property so you can relate the facts to the client from a personal level.
- Be prepared to tell a few stories relating to other clients and market situations. It is surprising how stories will gain the attention of the client and help your presentation overall.
- As part of the presentation, use plenty of digital photographs on your laptop computer. Those photographs can be rolling automatically as a slide presentation whilst you talk to the client about their property. Most of those photographs should be of the clients property, the surrounding locations, and competing properties. In this way the client will be connecting with their property and your conversation. Avoid slides with any words. Pictures will help grab the clients attention.
Top agents today take deliberate effort when it comes to the property presentation and connecting with the client. Everything needs to be specific in content and accuracy. Expect the other competing agents to do their very best to derail your property presentation. You will not have a second chance to meet with the client, so every presentation needs to be the best.
When it comes to weigh commercial real estate listing, presentation, or inspection, it is quite likely that the parties will give you a few objections in the negotiation. Objections tend to be a testing process to see if you satisfy the necessary factors that the other party requires in making a decision.
Top agents in commercial property know that practice is always required when it comes to negotiating and handling objections. You can never do enough of this type of practice when it comes to commercial and retail real estate. Build some of those topics into practice and role playing in your team meetings on a once a week basis. Current market conditions will always give you lots of factors to work with and debate as part of offsetting objections.
So here are some strategies to help you handle the objections that will arise from property sellers, landlords, buyers, and tenants.
- When the objection is raised, you need time to think about your response. Some agents will take notes as part of the negotiation and response process. As you take the notes you can consider the alternatives in responding. Solicitors do this all the time as part of working with difficult clients and customers.
- Some agents will go for the strategy of a pregnant pause. This may only be a few seconds, but in reality it will seem like half an hour. When the client has given you the objection, consider the response before you come back with the comment.
- If you need more time, you can ask the client to qualify and explain their position further. Again, this is a strategy of delay allowing you to consider your response. When you ask more questions, the client can invariably give you some leverage to respond. This process is called a Freudian slip. It is used by the top agents all the time; it is simply a matter of asking questions and digging deeper. As you get the greater levels of response you can interpret the answers from the other party.
- If the client or the customer has particular concerns, you can acknowledge them and then restate them in your words. In this way the client or the customer will then understand that you can relate to their situation.
- Break the concerns down into single factors and matters. One big problem or objection is actually a number of issues, some of which can be resolved easily.
- Respond to the other party with confidence and local market knowledge. It is very hard for the other party to refute or reject prevailing market conditions and market evidence.
- Give the other party some clear stages of resolving the problem. Show them how you can move ahead and help solve the overall situation. Determine what their best fallback position may be if it exists. Tell them that they may only have one chance to close on the transaction. If the chance passes them by, they may lose the property enquiry or the initiative entirely.
In commercial real estate today it is incumbent on us to be confident and connecting when it comes to negotiating and handling objections. This process and practice takes time to perfect. Learn as much as you can in this specialist part of the sales and business environment.
When it comes to selling and leasing commercial property today, it is really important that you understand the factors relating to competing properties in your local area.
Prices and rents for commercial and retail property will change throughout the year. They will also change by location and property type. Assessing the changes will allow you to be accurate and relevant when it comes to each and every particular property listing or presentation.
It is interesting to observe the inflated motivations and intentions of clients when it comes to setting prices and setting rentals in the sale or lease of any property. Most clients have a very good understanding of the price or rent that they require, with very little understanding of the actual results in the market today. This then says that every property listing should be well considered and negotiated between the agency and the client so that the property can be successfully marketed. You do not wish to waste your time now do you?
Top agents will avoid unrealistically priced properties and those clients that seem reluctant to accept the prevailing the factors of the local property market. Let’s face it; there are plenty of other listings out there to focus on.
Some agents will still however take on a property listing that is overpriced, expecting that they can condition the client over time to the true market conditions. They may also use a time based method of sale such as auction or tender to achieve that outcome. The strategy does work, providing you are well skilled in the client conditioning process.
Here are some factors to help you with local property market conditions and prepare yourself for future listing situations with clients.
- Look for similar property types in the local area. Gather information regards those properties when it comes to marketing strategies, prices or rentals, and time on market. It can also be that the agents involved with those other listings are not servicing or marketing the properties well. You will need to form an opinion that is relevant and accurate. Look at all the competing properties locally and inspect them in some basic form prior to using them as evidence with your client.
- Understand the differences between properties when it comes to improvements. Also consider the locational factors, and the size of the properties in question. Can one property be considered more attractive than another, and for what reason? Will that have an impact on property marketing, potential enquiry, price, or rental?
- Assess the time on market for each property type in your territory. The time on market will be impacted by current property enquiry and the supply and demand for premises. Future developments will have impact on existing properties locally. The local business sentiment will also have relevance to the time on market.
A successful property listing will generally be created providing you understand the prevailing market conditions, and can convince the client of those factors. It takes practice, however the client conditioning process will help you in establishing well priced listings that will attract enquiry. That’s what commercial and retail real estate is all about
When it comes to the marketing of commercial property today, the focus that you create through the campaign will help you build the enquiry rate and the inspection profile. It directly follows that a well-constructed campaign will give you a lot of leads and opportunities, regardless of the current and existing property market.
The fact of the matter is that far too many commercial properties are generically promoted and advertised. The features of each and every property should be identified and optimized in each marketing campaign. Those features should consistently flow through all elements of the marketing campaign.
Here are some tips to help the strategy behind your next marketing effort and property listing.
- What are the best days of the week to advertise commercial property locally? To some degree, the answer will depend on the attributes of the property and the target market. Commonly it is found that property marketing is more effective between the days of Wednesday to Saturday on a weekly basis. The fact of the matter is that you should know what days are better for your property promotion activity.
- Defining the target market will help you with the layout of the advertising campaign, the features to be promoted, and the channels of media that you want to use. In most cases, the Internet will be high on the list of marketing alternatives. It is both convenient and economical to use the Internet as part of the campaign; to gain maximum penetration on Internet based adverts use keywords associated with the property type and location. You can get these keywords from search engine research on a weekly or monthly basis. In that way you will stay ahead of the enquiry trends to the search engines and utilise the correct words as part of your advertising format. Most people enquiring regards properties for sale or for lease will go to the Internet first before they lift the telephone and talk to local property agent. Keyword optimization will help you with your enquiry rates from each property listed on the Internet.
- Professional photographs are critical when it comes to property promotion. If you want your advertisement to stand out efficiently and effectively, devote part of the vendor paid advertising campaign to professional photographs. Professional photographers know when to take the photographs, and how to make the property features stand out.
- Inspection feedback to the property owner should occur after every property inspection. This is both a conditioning process and also a communication advantage when it comes to helping the client see the trends of the local property market today, and how they will need to adjust their thoughts on price or rent as the case may be. This naturally assumes that you are getting inspections from your advertising. If this is not the case, have a serious look at your property promotional strategy and revisit the plan for any modifications that can occur. There are reasons why enquiries do not come to you. Resolve those reasons quickly and effectively at the earliest possible time in any property promotion.
- Test and measure every marketing campaign on a twice weekly basis. This will normally be on a Wednesday and a Friday. Observe the results that you get from every media channel and property advertisement. Test and measure the layouts together with the placement of media. In your location, some promotional processes will be more effective than others when it comes to commercial and retail property. Make the right choices, and the enquiry will come to you regularly and directly.
When the property market is slow and tough, the marketing process becomes even more critical. Every property listing that is exclusively promoted should be subjected to scrutiny and strategy throughout the entire campaign. In this way you will be a top agent producing the best results from every listing on your books.
A sales pitch in commercial real estate can be a challenging process especially when you are up against other agents competing for the same property when the market is saturated with listings or agents. You do not know what the competitors are doing or saying and how they will pitch for the listing.
The best way to do a commercial real estate presentation is to start from a base of information about the clients need as you see it, and then ask questions to get their opinion on key issues. In this way you have their attention and you can show them that you really do know what they need or what the market can do for them.
Here are some other ideas to feed into your sales pitch:
- Questions create momentum in your presentation. For this reason it pays to consider and prepare for the right questions that will have real relevance to the presentation. You could include in those questions what the client has done with the property over recent time and what their intentions may be to move ahead with it now. Ask them about their biggest challenge now in moving the property, and what they see as the best outcome. From this information you can open up the discussion about the local market and current levels of enquiry.
- Local market knowledge will give you confidence to move through challenges that may be presented to you by the client. In most cases the client will not know much about the current market and the results that have been coming out of it.
- Understand the customer and their current property problem. Let them see that you relate to their concerns and show them how you will move matters forward. Your pitch is not really about you and your skills; it is about them and their property pain. Identify the pain and then provide the relief with real strategy.
- Hone your critical skills and practice them regularly. If you have any weaknesses, deal with them in role play and personal improvement. Sometimes your greatest weakness as a salesperson is the only thing that is holding you back from a great leap forward in your business and market share.
- Do not close or negotiate too early in the pitch process. Far too many sales people do this. It sends the wrong message to the client. Desperation does not do well in a sales presentation today.
- Use the right resources and have them available at your fingertips. There is nothing worse that pitching for a listing and not having all of the right tools to take you forward.
Follow up all presentations professionally and efficiently. Some clients will not make a choice on agent for a few days. Make sure they see your professionalism in winning and losing a presentation. Brand yourself as the best agent in a professional way.