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 brokerage, what do your customers look like, where are they located, and what do they want from you? Why would they contact you? They are interesting questions; when you know the answers, you have the central focus of your prospecting model.
One of the biggest mistakes in commercial real estate is for an agent or a broker to prospect generically over a large area with little focus. The prospecting message then becomes clouded and non-specific. A message of that type will have little attraction to the target audience of local property investors and business owners. So it is clear that a few decisions need to be made regards the clients and prospects that you want to work with. I like to call it a ‘customer commonality’ process.
To get some direction with your customer focus and prospecting model, consider the following ideas and topics. See how they can be merged into your client contact systems:
- The best prospecting model involves personal follow up and contact. Anything that you send out by way of correspondence, marketing, or brochures, needs to be followed up with a telephone call. It directly follows that your letters sent and brochures dispatched should be in suitable numbers for new personal contact and follow through. The process should be repeated every 30 or 60 days.
- Understand the activities in the market today. What pressures are occurring on property owners and business leaders? Where can you offer the best levels of assistance and professional service? In a town or a city, there are likely to be a number of answers to these questions. For that reason you should consider separate prospecting models and messages for different market segments and different market locations.
- Review your area geographically so that you can split your prospecting efforts up into groups of buildings, groups of properties, and types of people. This then helps you significantly with the marketing message and central prospecting concept. It is quite clear that a generic prospecting letter is of little use and is highly likely to be put into the rubbish bin rather quickly. To lessen this chance of any failure factor, make your marketing messages quite specific and of interest and value to the person that you are connecting with. Provide some information regards the market, recent listings, prices, rentals, or industry changes. Whilst keeping the letter or the correspondence simple, a few dot points will capture the interest of the reader.
- When you break your customer base up into a number of market segments, you will see that there are common factors and leads to be exploited. They may be associated with market trends, property activity, regional changes, and transport issues, property zoning, and planning matters. When something happens regionally that can have impact on property owners and occupants, you have an opportunity to make direct contact with your database in a relevant and real way. That’s what professional prospecting is all about.
In saying all of these things, it is wise for you to focus on a particular property type within a location. In that way you can relate specifically and accurately to the variations in price, rental, market interest, and the supply of new stock. The commercial real estate industry is not difficult; however it does require specific focus and property speciality.
It is a fact that the commercial real estate market today is under some pressure and is also highly competitive. For you to be successful in your career in the industry, you will need a plan of action and a tracking mechanism to understand what’s working and what needs to change in your business model. Notice I said ‘your business model’? Most agents and brokers don’t have one! They simply let the days pass with little focus and random action. That is a recipe for losing business over time.
The commercial property industry is not all that different from city to city, state to state, and country to country. The property problems are all similar and simply need understanding. Taking direct action in your market every day will help you see the opportunities to work on and the clients to serve.
Having worked in the industry for some time, I have seen three distinct mistakes made by the majority of brokers and agents in the industry. Some of those agents eventually adjust and resolve their mistakes, whilst others overlook them to the detriment of their market share.
So what exactly what are these three all too common mistakes? How can you deal with them? Here are some ideas:
- The most common mistake made by all brokers and agents centres on prospecting. They simply fail to develop a prospecting plan that they can work to every day in a consistent way. They let the pressures of the day overtake their diary and business activities. Soon prospecting becomes item number 8 in a list of 10 issues. Inevitably the broker or agent never gets to the prospecting process in a regular way. If you want to rise to the top of your industry and generate reasonable market share, you will need a prospecting process that you can work to every day. Prospecting should be item 1 in your diary.
- Success in the industry is largely built on established relationships with key people. Whilst a prospecting model as mentioned earlier can drive more new people towards you, you do need to establish ongoing contact in a consistent and relevant way. When you first connect with new property owners and property investors, most of them will not have an immediate need for selling or leasing. That will however change over time, and you need to be there for the moment where experience and property expertise will be needed. Most top agents in the industry win the new business due to establish relationships built over many years.
- Marketing processes will vary from property to property and city to city. That being said, your marketing processes should be specific and special; they need to stand out around all the other agent generic advertising. When a client or prospect picks up the newspaper or reviews the Internet, they need to see your advertising and property listings as special and unique within the property type. A property listing that is well marketed will attract many other clients to you over time. Build your marketing skills to increase the brokerage profile with the property speciality. Improve your marketing skills to show the people in the industry of your relevance.
These three simple factors will have a lot to do with your success as an agent or a broker. Choose to improve each of them at each and every opportunity. Stand out as the top agent that you want to be. Be prepared to go that little bit further in all three of the categories.
The commercial property market is a challenge at the best of times. There are plenty of things to do when it comes to commercial brokerage and agency. Each and every day a certain number of hours should be devoted to the prospecting process. That activity will be at a personal level for any agent or broker.
It stands to reason that a good broker will have a successful prospecting model to encourage new clients and listings in a regular way. The earlier that agents and brokers move towards this planning process and its implementation, the faster they move up the ranks of the market with listings and commissions.
Here are some tips to help you with the prospecting process that should be applied to office, industrial, or retail property. Given your local market conditions, you can add to the list as appropriate:
- Understand the activities of the market over the last two or three years. As the market been attracting activity or has it been contracting? It is best to work within a market that has growth and opportunity. It is best to work with property types that have a future.
- Many brokerages employ agents on the assumption that the agents will bring in the required new sales and leasing business. Certainly that is the case to a degree; it should however be observed that a good real estate brokerage will have generic marketing strategies and material to help the agents with their daily prospecting activities. An agent or a broker with little or no support from their principal will struggle.
- It is critical that a broker or an agent get signboards into their territory as soon as possible. Those signboards should be on exclusive listings. Signboard presence will always help local market profile and encourage inbound telephone calls. On that basis you can build your database.
- The Internet today offers significant opportunity when it comes to business profile and property marketing. Every brokerage or agency should have a substantial business website to promote sales and leasing listings. The brokerage should always be updating the website with the latest technology tools to capture inbound enquiries. A database portal is part of that process.
- Set aside 2 hours per day to contact new people through the local area. The easiest way to do that is through a consistent and professional cold calling process. When you have connected with a number of people across the telephone, you can move out into the marketplace and door knock a number of businesses and property owners. Personal contact in our market today is really important.
- Every new property listing will give you an opportunity to talk to many other property owners and businesses in the same location. Every successful transaction will give you further reasons to connect with the market place. Use your existing listings and exclusive listings to connect with the property market.
In looking at these activities, it is easy to see that the involvement of the agent or broker at a personal level is critical. Momentum is required every day to establish a good prospecting model to convert more listings and commissions.
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.
In commercial real estate brokerage you need a good database. When I say ‘good’ I am not referring to the complexity or brand of database. What I am referring to is that of the accuracy and volume of data that you have collected.
There is no point running a database unless you keep the information up to date and accurate. So many brokers struggle with that requirement. You may have heard the saying, ‘rubbish in and rubbish out’? That rule certainly applies in this case. Keep your contact information up to date and accurate.
If you want to dominate your market, then you will need to contact plenty of new people each day. If you prospect for 3 hours per working day (the recommended average), then half of that time should be devoted to new contacts, and the other half of the time should be devoted to current contacts. Over time the pipeline of contact that you establish will help you with sales and leasing opportunities.
Over time your prospects and clients will be contacted many times; that is how you build market share and opportunities. On that basis your customer contact system has to be flexible and accurate. It also requires the personal involvement and accuracy of the agent or broker.
Here are some rules to help you with your prospecting and client contact systems:
- Split your prospecting time 50/50 between current contacts and new people. That is how you will build new business.
- Focus on the process of ongoing contact. That will mean telephone calls and emails to the people that you know in an ongoing way. Record the results of your last points of contact so you can refer to earlier client situations and discussions.
- Get email addresses and the consent of the people that you are talking to about ongoing contact through email. You can then set up an ‘auto responder’ for that process. Not only is it economical, but also very convenient. It will save you a lot of time.
- Build ‘trust’ over time with your clients and prospects by providing valuable local market information. You can do that with listing sheets and sale or leasing updates.
- The ideal contact frequency to use with all of your clients and prospects will be your choice, however it has been proven that you will need to make valuable personal contact (telephone or meeting) at least once every 90 days.
So there are some key things to do here. Establish your prospecting system efficiently so you can get results in your market and with the property owners or business proprietors that really do need your service.
In commercial real estate agency and brokerage, cold calling is an essential part of the business building process. Every agent and every broker should undertake a number of cold calls every day to build their market share with new people and new prospects.
In any property market and at any time, there will be new people to approach regards the professional services that you can provide in sales, leasing, or property management. At least 25 new calls should be made every day to new people that you have not spoken to before. It will take you 2 hours to make those calls. From doing that, you will nearly always reach approximately 10 or 12 people in one sitting and from that you can get one or two new meetings. That is how you get the new relationships started.
So you need to establish your cold calling process to take your business forward as an agent or broker. You should also practice your dialogue. Here are some ideas to help you with that:
- It is hard to get traction in the cold calling process without practice. This means that you will need to refine your dialogue and improve it over time. This can be done each morning as part of your preparation for the working day. You can practice call conversations as you drive to work. Without any other person in the motor vehicle, you have the opportunity to refine your scripts and your conversational ability for the cold calls that need to be done.
- Each evening you can prepare a list of 25 people to call and approach the next day. Given that we work with mainly property investors and business owners, it is really quite easy to establish a list of contacts to call. The business telephone book will give you plenty of telephone numbers. In addition to that, you can research one or two property owners each day to add to the list.
- Split your prospecting territory up into zones. That will allow you to focus your call processes to particular streets and business types. As a general rule, you should be travelling through the streets of your territory each day to identify any opportunities that you can see.
- It is best to get the calls done first thing at the start of the day. In that way nothing can interfere with your progress and prospecting system. Avoid making or attending meetings at the start of the day so that you can get your prospecting done efficiently and effectively.
- Track your call progress in a database that you personally maintain. Where possible, use a computer for this process, and have a telephone and the computer in front of you as part of making the cold calls. You can then enter the results of calls into the database immediately.
- Purchase a headset to use as part of the call prospecting system. The immediate advantage here is that you will have your hands free to record the results of the conversation. One other clear advantage is that you can stand up as part of the calling process. It is well known that call conversations made from a standing position are far more effective and connecting than those from a sitting position at a desk.
- Understand the rules that apply to the do not call register in your area. Ensure that you are adhering to those rules in making the calls.
- Track and measure your call activity and meeting conversions. The primary object of making a call should be to create a meeting with people that have a future or current need in commercial property.
- Collect e-mail addresses and mobile telephone numbers as part of the prospecting activity. Get the permission of the person that you are speaking to for ongoing contact so you can send relevant property information and advise them of market activity.
The prospecting process does not need to be hard. The telephone can be a distinct advantage when it comes to building better market share and growing your database. That being said, it does require a diligent focus and ongoing activity. That is a personal skill and a personal process.
In commercial real estate prospecting you will get lots of ‘push-backs’ as part of talking to new people. Some call it the ‘rejection factor’. Many agents take the rejection and use it as a reason to stop prospecting.
Show me an agent that doesn’t make the cold calls and prospect every day, and I will show you someone with low income and poor listings. Get the message?
If you have chosen a career in commercial real estate, then be prepared to work hard at prospecting. The requirement will never disappear; in fact, it will increase in importance. Rise to the challenge and connect with more people. That’s what prospecting is all about. That is how you become a top agent.
So the message here is clear. Understand that rejection is a part of connecting with new people and in finding new clients. Some will not want to talk to you or meet with you, yet others will. You need to find the right people that want to do something with property or are happy to stay in contact with you for the day that they need property help.
To make all of this work you have to create a solid and effective prospecting system that you do for 2 or 3 hours every day. That’s the rule that you must stick to. Over a period of 3 months your skills in the process will improve and your conversions will rise. Soon you will have quality listings and the majority of them will be ‘exclusive’. When you control your listing stock, the market has to come to you. That is why ‘exclusive’ listings are so important to commercial real estate agents.
So what do people say to you when you prospect? What are the standard ‘push-backs’? Try some of these:
- Not today thanks
- Send me something
- Call me back next week
- We already use someone else
- Too busy to talk right now
- We are just fine at the moment
You can most likely add to this list. There are so many variations that you strike. Most clients and prospects will ‘push-back’ at least twice in a prospecting or cold call situation. You will hear versions of the above statements.
So what should you do? You should be prepared for the rejection. Practice your responses so you can keep the conversation moving ahead. The advantage that you have is that you are the person that made the call; you can be totally prepared to connect in a professional way.
It should be said that your call should be made on the basis of a conversation and not a pitch. Find out what the other person is doing now with property and what they could require in the future. Make the calls and the ‘door-knocking’ work for you in that way.
In commercial real estate agency it is wise to plan your prospecting efforts and actions. On an average working day many different things will put pressure on your prospecting. Unfortunately many agents will drop the prospecting activity for the slightest reason. Over time that single choice will have a major impact on the way they grow their business and market share.
So you have some choices here:
- You can grow your real estate business and market share through directed effort each day on a client, property, and street by street basis, or
- You can randomly make calls and contacts if and when time permits.
The comfort zone is a big challenge for many agents and it will slow their listing chances and commissions given half a chance. When time gets tough, keep prospecting and stick to your plan.
To solve all of these issues it is best to have the prospecting plan that gets you in front of more property investors and business owners. It has to be specific and relevant to your property market and sales or leasing territory.
Not everyone that you talk to will want to do business with you or even discuss property issues; that is quite OK as you really should not waste you valuable time on people that do not have a need or and interest. Talk to more people and build your skill in doing so. Over time that one single fact will help you in so many ways to become a top real estate agent.
Many new brokers and agents to the industry struggle with finding clients and prospects to talk to as part of prospecting. The soon know that growing market share and commissions depends on one thing only and that is prospecting; when they get focused on it they also soon know that prospecting is a complex and dedicated process.
Here is a prospecting plan for you. Expect it to be a challenge to your diary and daily activities.
- Get to know the streets and businesses in your primary sales and leasing territory. On a street by street basis, identify the property owners and the businesses in occupancy. Talk to both. Find out what they are doing in property now and in the future.
- Review the other listings in the area that are listed with other agents. Use those listings as reasons to talk to other property owners and businesses in the same street and general location.
- Check out the old sale records for your region. Find those property owners that purchased property about 3 or 4 years ago. On average those property owners are going to be the next to come back into the market in some form or another. Connect with them for that process.
- Every property listing that you have on your books will be an excuse to talk to other businesses and investors. Use your quality listings in this way. Over time your current listings will give you more leads and information to act on.
- Walk the streets in your property precinct. You will find and see information that you can work with. Take plenty of business cards with you to leave at the reception desks, and with the business owners that you see or drop into.
- Use the telephone to make plenty of cold and warm calls to your market and business owners. Track your progress and your calls with a good database.
Prospecting in commercial real estate does not need to be hard but it does need to be systemised. In that way you can steadily improve your market share.
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In commercial real estate it is easy to spend too much time with current clients or prospects, and little time in finding new ones. When this happens your leads and listings tend to slow and will eventually stall. For this reason you must have some systems on the go that will help you find more new clients.
There are always new people to connect with in our industry. The ways to tap into them are simple and yet systemised. Here are some tips to help you with that ‘client growth’ requirement:
- Look for pressure points within the market. Some property owners will be experiencing tenant changes, higher vacancies, renovation pressures, and financial changes. The list goes on and will change during the year. Look for the clients that need help in adjusting to prevailing market conditions.
- Track the other real estate agent boards for both sales and leasing. When they put a new board up on a property, you should contact the owners around it and in the same general area. There is likely to be another property owner nearby that would like to compete with the existing listing. You can help them with that ‘competition’.
- Do a street by street canvass through your territory. Meet the business owners and track down the property owners. This does take an organised process but the rewards are many when you stay fixed to a system of contact.
- List quality properties as a general rule. The quality properties will give you better rates of enquiry from buyers and tenants. When you control the listings you control the enquiry.
- Offer special marketing solutions that are unique and relevant. These marketing solutions will help you when it comes to presenting and pitching your services.
- Build a database of relevance. It is very hard for a client to ignore your database if it is strong and large. Use your database as leverage in your presentation to the client. Show the client the size of the database and give them an indicative ‘short list’ of potential people you would like to quote their property to when the listing is signed.
- Referral business will be available when you connect with the clients and contacts that you have served well in sales and leasing.
- Ask for property management business from those clients, buyers, and landlords that are involved with sales and leasing activity. A great sales or leasing outcome is a reason to quote your property management services.
There are always new ways to get clients. Some will work for you and others will not. Decide what you can do in that regard and adopt a daily process to build your database of clients.