Friday, October 7, 2016

Are you Getting the MOST from your Commercial Real Estate Broker?

Image Attribution: www.menlocre.com
I recently conducted a training session with a collection of commercial real estate brokers. I asked the group how many would agree to market a commercial real estate listing without a signed exclusive arrangement with the owner of the property. No hands were raised.

Next, I polled the group to find out how many would search for a building on their client's behalf without a signed agreement. Every hand shot up.

As I pondered the reason for the difference in direction, it occurred to me.

When we approach an owner of a building and discuss finding a tenant or buyer for the vacancy, we spend our time describing our process in locating the tenant or buyer. Generally, the marketing process includes signage, brochures, mailers, web presence, virtual video tours, entry into the multiple listing services, broker open houses, tours of the property with prospective occupants, receiving offers, vetting potential buyers or tenants, and execution of the sale or lease. These steps are tangible and measurable. Also, we are asking the owner to compensate us if we successfully lease or sell his building - thus the need for the contractual relationship.

Now consider our process when we search for a building - that silence you hear is deafening. You see most commercial real estate brokers don't have a process for searching - just a process for marketing a vacant building. Therefore, when you ask a commercial broker to find you a building, the disconnect occurs - and you are getting shortchanged!

So, how do you get the most out of your commercial real estate broker when searching for a building? I would suggest doing these things.

Interview three brokers. Select the one that can clearly describe the process he will employ to find your new business home. Pay careful attention to the way in which he will send notices to cooperating brokers, review the submittals, preview the alternatives, conduct the tours, request proposals or draft officers, analyze the responses and monitor the escrow or lease phase.

Engage one - in writing. Sign an agreement with the broker of your choice. Stipulate you are engaging him for a period of thirty days with a right to cancel the agreement if you are not satisfied with the results. Let him conduct his process without worrying about waking earlier than his competition and showing you a property he knows few details about. Allow him to WORK for you and find you the very best deal available. Make him a member of your team and heed his advice on procedure.

Enjoy the process. I can assure you'll be pleased with the results. You will also save yourself time, effort and money - and the right home for your business.