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Auction Method of Sale – Checklist and Tips for Commercial Agents

In commercial real estate today, auction activity can be quite specific for the particular property.  For this very reason, you should have a specific checklist for taking the property to auction.

If you choose to use this method of sale, then it should be for the right property and it should be done for the right reasons.  Even in tough property market conditions, the auction process can work quite successfully providing the agent focuses effort and time into the marketing campaign to attract the right buyers.

As a successful method of sale, it requires specific effort to get the message out into the group of target buyers.  Typically the campaign will go for a period of 6 to 8 weeks.  During this time, the first half of the campaign will be critical to the momentum that you require.  The marketing message has to reach the target audience comprehensively with a consistent offering and full property details.

Here is a checklist that you can use or adopt when considering the auction method of sale.

  1. Get the correct appointment to act signed in accordance with your agency laws and legislation.
  2. Review similar properties in the same location that could have an impact on your marketing campaign.
  3. Check out the subject property detail relative to the information provided by the client.
  4. Look for any unusual factors of property ownership or obligation that will have some impact on the auction sale campaign.
  5. Inspect the property comprehensively so that you have a good list of features and improvements to merge into the draft advertising.
  6. Get professional photographs taken of the property to use in the marketing campaign.
  7. Prepare a list of selling points that should feature in all of your advertising material.
  8. Review the property for the potential inspection process.  Understand how you will take people around the property when they have been qualified for that process.
  9. Prepare draft advertising for the client to review and approve.
  10. From the approved advertising material, prepare a promotional brochure for distribution via e-mail, direct mail, and personal inspection.
  11. Review the database in your office for prospects that may have an interest in the property and that may be suitable for a pre-release property inspection.
  12. If the property involves leases and tenancies, you will need to comprehensively check all of those documents for details of income, expenditure, and property performance.
  13. Prepare an investment report or information memorandum to be used in the campaign.  The detail within this document should be reviewed for accuracy and relevance.  Get the client to approve the document in its final form and before it is dispatched to any prospects.
  14. Prepare the documentation relative to the auction method of sale.  In some cases, this documentation should be prepared by the vendor’s solicitor.
  15. Start promoting the property and hold the inspections with qualified prospects.
  16. Keep the property owner fully briefed on inspection results and market feedback.
  17. As you move towards sale, it is relevant to get the property owners thoughts on the reserve price for the property.  On the auction day, the reserve price should be given to you in writing.
  18. You may or may not want to take offers prior to auction.  That is a strategic decision subject to the prevailing market conditions and the instruction of the vendor.
  19. The auction should proceed as planned unless the client has achieved a sale prior to the auction date.  Suitable deposits and contracts should be exchanged subject to the method of sale used.

You can add to this list based on the property type, your location, and the particular vendor.  This method of sale is quite unique and involves a dedicated promotional process that can only be achieved through an exclusive listing.

You can get more tips in our Newsletter right here.

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Commercial Real Estate Agents – Incredibly Easy Prospecting Model and Timeline

In commercial real estate, you need a prospecting model if you want to be successful.  It is a very simple message and fact, but very complex task to initiate for some (although it does not need to be so).  The sooner you develop the process, the quicker you will get results in commissions and listings.

In any commercial real estate team, it is easy to see the difference between the agents that regularly prospect and those that don’t.  The difference will be in quality of listing stock, and conversions to closed transactions.

Establish Your Prospecting Process

The prospecting process is unique to you yourself as an individual and property specialist, and your territory with its property types and property investors.  To get your system going, it is necessary to establish some rules relative to the local area and the property types.  First and foremost, you should understand the following factors:

  • Set some boundaries relating to the primary area of focus in your region.  You cannot be an agent for everybody and cover every location.  The commercial property market is just so specialized that the knowledge required across different areas will be difficult to achieve and maintain.  It is better for you to become an area specialist and perhaps even a property specialist within the area.
  • With all of the available property types locally, determine the property types that will be of high demand into the future.  There is no point in you specialising in something that has little activity or reducing market share.
  • Get to know the history of property sales and leasing activity throughout your local region.  The historic trends in property sales, rental returns, business demographics, and population growth will influence the future of your commercial real estate market.  Ensure that your market has the expansion and churn factors that you require for property change over, sales, and rental.  The history of property activity is in fact a timeline.  The time line will show you where the opportunity will arise over coming months and years.

Within any local area, you will find groups of prospects that offer real commercial real estate opportunity on a regular basis.  Getting closer to those groups will help you with further listings and further inquiry.

Most particularly the top priority groups that will feed you with listings include the following:

  1. Franchise business groups seeking new property positions as part of their business model will always be on the lookout for good property locations.  Every franchise group will have unique requirements of property selection and occupancy.  For this very reason, approach them individually and get to know their selection process and terms of acquisition.  When it comes to leasing, they will usually have a standard form of lease to support their franchise business model.  They will also have particular requirements of demographics relative to the local area, the population, and exposure.
  2. Solicitors with clients that have property challenges or needs will need your help.  Whilst solicitors may know how to transact property, they usually need assistance when it comes to liquidating a property or acquiring a new one.  Local market knowledge will help them greatly with this process, and you can be the source of that experience when it comes to the local property market.
  3. Accountants with clients and property investors that require property solutions are a always out there looking for specialised property assistance and local market knowledge.  This is where you can be of high value to them as they work to resolve their client’s property problems.

Every existing property listing is an opportunity to talk to other property owners and business proprietors.  In this way you can expand your market intelligence and relevance as a property specialist.