As a general rule in commercial real estate brokerage, every proposal that you put together should be benefit focused on the client. Show the client exactly how they will benefit from using your comprehensive services as a marketing specialist.
Use a Gantt chart to show the client the stages of listing, marketing, inspecting, and negotiating. This illustrative charting method is very effective when it comes to helping the client through a comprehensive and complex marketing process. It can also be a major point of difference in your proposal layout.
In today’s property market, the generic listing and marketing approach really doesn’t work. The competition in the marketplace is significant from other listings, and the experience and expertise of your competing agents and brokers will also place pressures on your listing conversions. Give the client some real reasons to choose you as the top agent of choice to solve their property pain.
It is worthwhile remembering that the client doesn’t want to be an experiment in marketing. They want their property to achieve the best levels of enquiry in the most effective and direct way. You hold the keys to the process and your proposal will need to clearly outline the strategies and recommendations.
Here are some tips to help you with constructing and submitting a proposal to sell or lease a commercial property today:
- Stand out as uniquely qualified to handle the property type in the town or city. You will need some testimonials and market evidence to help the client understand those situations and recommendations.
- Review the property for the strengths and weaknesses that will have an impact on the marketing campaign. The weaknesses may need to be addressed prior to the commencement of promotion. The strengths can be helpful when it comes to advertising layout and points of attraction.
- Determine the target market that will have a keen interest in the property type. Build your marketing campaign around the target market using specific points of difference and promotional processes that clearly tap into the target audience. Help the client understand those strategies and the reasons you are making the recommendations.
- Show the client how they will clearly benefit from utilizing your brokerage services and market coverage. Use your database as a point of difference when it comes to creating enquiry and spreading the message about the property. Create a shortlist of buyers or tenants as the case may be from the database; tell the client how you will be connecting into the short list of qualified parties as a priority as soon as the property is released to the market.
The focus of your proposal should be to attract the correct level of inquiry and generate inspections as soon as possible. When you get the inspections underway, you have something to work with and can then give the client feedback from those inspections.
In commercial real estate today, the proposal that you provide to the client is at least 50% of your business winning strategy. The other 50% is your ability to connect and communicate the right message to the client about the property and the local property market.
This then says that your proposal structure should be carefully considered and crafted to suit the situation. Generic proposals are really a waste of time.
You need to make your strategy and offering stand out as the best solution to the client given the challenges that they face today.
Here are some ideas to help your client proposal structure in sales, leasing, or property management.
- At the very front of the document you should have an executive summary. That part of the document can only be inserted after the proposal has been put together, and after you have completed the necessary recommendations and strategies. That being said, the executive summary is perhaps the most important part of the document to focus the client on your ideas and recommendations. The summary should be no more than two pages in length and should be structured around clear dot points. The executive summary can make your sales pitch and presentation far more effective and relevant.
- The length of a proposal document can vary depending on property complexity. You should however give preference to simplicity in layout and a document that is easy to understand, read, and interpret. Many clients will not read past the first few pages of the proposal document. Most proposal documents should be no more than 25 pages in length. Many will be less than 12 pages in length.
- It is important to clarify the facts about the property and the challenges that the client faces. That should occur early in your document layout so the client understands that you are on their wavelength.
- Provide details of the local property market together with competing properties, prices, rentals, and time on market. This information will give you a solid base to recommend marketing strategies and sales or leasing alternatives.
- Every client likes to make some choices and have some control. For this reason your recommendations should have two or three alternative choices for the client to consider. Invariably they will usually choose the middle recommendation that is neither too expensive nor poorly structured.
- Some clients will have definite concerns regards the local property market today, and where their property sits in relation to that. Develop a question and answer process to insert into your proposal where you can handle those troubling factors that the client has raised with you.
- Provide a a graphing process to show the client the way you will take them as part of the marketing campaign. A Gantt chart is the best graph to use.
- The fee structure will form an important part of the document and is usually placed towards the rear. That being said, you should structure your fees competitively but also realistically for the amount of work involved in the listing or appointment.
There is always a basic structure to a proposal, but the main part of the document will always be focused on the property. In this way you show relevance to the client as the top agent with the right skills to help them solve the property problem.
In commercial and retail real estate, it is common to be asked to do a property management proposal to manage a property that has just been sold or leased. That is usually the best time to secure a new management. The owner of the property at that time is normally quite receptive to discussing property management strategies and services. Most property landlords do not have either the experience or the expertise to manage their property comprehensively. They have not got the latest tools and the systems to correctly manage the cash flow in keeping with the tenant mix and the lease profiles. When you have a number of tenants in the building, the entire management process becomes more complex and time consuming.
Managing a property is not simply just a matter of collecting rent and negotiating leases. There are many strategies and systems to be applied across the property for the long term. In this way the rental and the tenancy mix can be structured or improved. A property management proposal should be prepared with due relevance to the property function and requirements. That says that every proposal should be based on the needs of the client and the challenges of the property. Here are some factors to build into your proposal structure:
- The time involved in managing a property will vary substantially based on the needs of the client and the challenges of the property. When setting a new fee for a new client, it is wise to consider the number of hours required each week to perform the expected tasks of management. When you relate this time factor to your operational costs of the division, you will soon see the breakeven point in the fee structure. Far too many agents simply set a fee based on known cash flow without the regard for expected time input.
- The tenant mix for the property will have both challenges and opportunities. The challenges will be in upcoming vacancies and the repositioning of sitting tenants. That is where lease management becomes really important to the property process. Opportunities will always exist in renegotiating leases with the sitting tenants to improve occupancy and potentially the market rental. Fees should be established in your proposal to cover the renegotiation activities with existing tenants.
- Be quite clear when it comes to the reporting processes to be provided to the landlord. Some landlords can be overly demanding when it comes to the weekly and monthly property reports. If a higher reporting requirement exists, then the fee structure for the property management service should be appropriately set.
It is interesting to note that a quality property management service will only occur if you have good people within your division. That is managers with the experience and the maturity to negotiate leases, optimise income, and manage expenditure activity. Property managers of this type can be hard to find and usually demand a reasonable salary base. That being said, they will always produce better quality work across the portfolio for the clients and the agency principal. To establish and run a professional commercial property management division, you need good people; there are no short cuts.