Negotiation in Commercial Real Estate can be a bit of a battle for some newer real estate agents, and the sellers and landlords you work with can be difficult to reason with, especially if you are the real estate agent doing the deal or negotiating the listing for them. You naively expect the client to say ‘yes’ to everything you say, and then don’t know what to do when things take a turn for the worse.
Many commercial property investors have been around for some years and have dealt with many real estate agents. They know the protocols and tricks of the trade. Expect them to challenge you in many ways. Have your answers ready.
So many times you hear real estate agents say things like this about clients:
The client won’t listen to me
The other agent won it on lower fees
They want a crazy price
They want to test the market now and sell later
This won’t sell in this market
They want to open list around many agents
Overpriced and poorly managed
The other agent stacked the price up
They want me to pay the marketing!
They took the cheaper option with Land Contract Pros And Cons that other dumb agent up the road
They are wasting Mobile Home Purchase Agreement my time
They are not genuine in selling
They are not honest and open in giving me the property detail
The tenancy schedule is really wrong and the client won’t give me the leases to look at
The list goes on, and I expect you would have a selection of your own observations to add. So what can you do here? Stick to your convictions.
Expect the client to be absolutely challenging from the start and have a professional confidence that shows the client that you really do know what they should do, and that your solution is best. If they say ‘no’, then that is OK. It is not the first and last ‘no’ response you will hear.
Above all else you have to stick by your convictions and recommendations in commercial real estate. Do not bend under pressure as it will get you nowhere in the long term. Know what the client needs to do to sell or lease the property today, give them the target market and clear solutions to attract it, charge a fair fee, and promote the property with client funds. It is better to walk away from a client that is unrealistic.
If the client wants you to discount any of your fees or marketing costs, or cut corners in the sale or lease of the property, in most cases you should stick by your original solutions and choices. If you give in to the client’s requests, they have manipulated you, and you will loose their respect in your skill and convictions; you could be wasting your time in taking the listing on.
Rarely do highly priced, fee discounted listings work. They stay on the market for a long time and the client then changes real estate agency to re-list at a lower price or rent. You have by then wasted a lot of precious time. Know what works with the property and its problems, and make sure the client sees your convictions to make it happen.
The first negotiation you will ever make is in listing the property. That negotiation and then every negotiation after it have to be firm and supported by your property knowledge and convictions.
Clients will take always time to warm to you and trust you as their real estate agent. To shorten this negotiation problem, position yourself as knowledgeable and very professional in all stages of the property activity. If you get a listing knock back or loose a listing opportunity, move on fast to the next client or prospect. Do not discount or prostitute your services; your living depends on it.
It is better to have a smaller number of quality listings with quality clients that really trust you, than have lots of highly priced open listings where the clients have discounted your marketing, services, and fees. There are plenty of properties out there to list and the way for you to find them is to prospect more. When in doubt, move on.