Commercial Real Estate Agent Prospecting Facts and Strategies

When you work as a commercial real estate agent or broker, it is essential that you develop and implement a prospecting program to generate new business leads. It is a personal process and it is not something that you can or should delegate.

I am amused sometimes when I hear that an agent has paid considerable money to a marketing company to ‘cold call’ their entire sales territory or market segment looking for leads and prospects to serve. Delegating the prospecting process to a marketing company or another ‘unskilled person’ is a waste of time and money. Commercial real estate is an industry built around personal relationships and trust; a marketing company or employed canvasser cannot offer that level of communication or service.

So why would a real estate agent employ such a ‘marketing firm’ to make prospecting calls? The answer in most cases is glaringly obvious; the agent doesn’t have the skill or the discipline for the prospecting process to be successful.

If you want to win the new business, then you will need to do it yourself. Yes, it takes time to get results and you will need to develop some new skills, but discipline will help you get to the results that you are seeking.

One thing should be said here; commercial real estate brokerage is tremendously rewarding for the sales people that can work hard and to a system or plan. Looking for leads and opportunities is part of the process or game. It’s a personal thing and it can’t be delegated.

Here are some way’s to find new business, better property listings, and good clients:

  • Redundant Properties – Some properties will move to a level of redundancy due to age, deterioration, change of zoning, or lack of tenants. When this happens it is time to move to the next phase of the property ‘lifecycle’. A good real estate agent can see the signs early and work closely with a property owner as they start to deal with the issue of investment change.
  • Vacant Land – As a city expands or suburbs change, vacant land will be rezoned for new development. Keep ahead of this opportunity by monitoring the planning and development applications at your local planning approvals office. Get copies of the public minutes of the planning committee meetings.
  • Old Listings – Some listings don’t sell or lease at the first attempt. What you can do here is withdraw the property from the market today and then revisit the property marketing effort a few months later in another and perhaps different marketing approach. Refreshing a listing is a valuable business process.
  • Open Listings – The best way to sell or lease a property is through an exclusive listing process. Open listings are very much a process of luck; most open listings stay on the market for a very long time and on average are far less successful when compared to the dedicated marketing efforts of an exclusive listing. Revisit old open listings to see if they can be optimised for a fresh marketing effort.
  • Larger Businesses – Local businesses are involved in property either as tenants or as owner occupiers. Business owners will need help with property from time to time. The best way to tap into that opportunity is through direct and ongoing contact. Cold call every business in your town or city and speak to them regularly about property needs and changes.
  • Surrounding Other Listings – When a competing agent puts a property on the market, you can use that listing as a reason to talk to all adjacent and nearby business and property owners. One property listing can be the catalyst to talk to others to see if they would like to compete or do something themselves.
  • Street Canvass – On a street by street basis, systematically move through your sales territory and research all property owners. Eventually you will create a good list of owners for your database. Ongoing contact will allow you to build valuable client relationships and the levels of trust that help grow commissions and listings.
  • Cold Calling – The telephone remains the most effective business tool that we have. Direct calls handled in a professional way will help you reach out to new people. Selectively researching the property owners and business people in your area will support the cold calling process.

A simple list like this will give you an abundance of property leads and opportunities. The secret to making things work for you is in doing it yourself.

Everything A Real Estate Agent Doesn’t Want You To Know-Part 1

MONEY MATTERS

Are you planning on buying or selling a home? Maybe refinancing? Perhaps you’d just like to pick up a few tips on home buying, selling and mortgage borrowing-if so you may want keep track of Money Matters in the months ahead as I will be giving out all kinds of tips and insights as we approach the home buying-selling season. I will be discussing a wide variety of real estate and mortgage financing issues you should know (Things real estate agents don’t want you to know). Well, good agents won’t have a problem with you knowing this information but the part-timers and less ethical operators would certainly prefer you not know what I am going to share with you!

You see, buying or selling a home is the largest investment of a lifetime for most people and it is a BIG business deal…a transaction composed people, emotions, contracts and cash…all the ingredients for legal and financial pain if you don’t know what you are doing. Real estate agents earn a commission when a home is sold whether they are the listing agent, the selling agent or both. Real estate agents typically (and legally) represent sellers in a real estate transaction and not buyers. Yet, every day, homebuyers refer to the real estate agent as “my real estate agent”…they are not your real estate agent…they are the home seller’s agent and agents have a legal duty to get the best selling price for the seller. Further, anything you tell them can and probably will be used against you to extract a higher selling price out of the deal. Sellers on the other hand are often manipulated into signing long term listing contracts for up to a year by an agent who will simply throw the listing into the multiple listing service (MLS) and hope another agent sells the property for them.

For agents, the name of the game is to get listing contracts…a common slogan amongst real estate agents is: “if you don’t list, you don’t last”. Once an agent gets a listing contract from a home seller, they will get the bulk of the commission when the house is sold whether they sell it or another agent sells the home. Not many sellers know this fact and many are swooned into long term listing agreements with hopeful promise of selling their homes at the highest possible price only to find out they don’t. Agents will say and do most anything to get a listing contract shy of breaking the law. And the big question for home sellers is are you working with a part time or full time agent? What is their background in marketing and sales? Do you really want to sign a long term listing agreement with a part timer that has one toe in the tub and no business background? Were talking about a business deal right?

Whether you are buying a home or selling a home you should be clearly aware that you will enter into legally binding contracts and relying on mortgage lenders to provide financing for the project. The question then becomes; how much do you know about contract law and mortgage financing? What are the most important elements of a contract and how does that impact you as a buyer or seller? This series of articles is generally drawn from my E-Report (101 Real Estate Tips for homebuyers, sellers and money borrowers). The report is designed as a crash course to provide you the information you need to know to protect your legal and financial interests whether you are a homebuyer or seller. This series of articles will touch upon the information you should know to keep from making blatantly stupid mistakes that could hurt you legally and financially and we’ll try to have some fun in the process…

Which reminds me! If you would like to receive a FREE copy of my E-Report: 101 Tips For Homebuyers, Sellers And Money Borrowers, go to smart Books website, send us an email and requesting a copy and we’ll send it to your email address within 24 hours-absolutely free-Another Ezine Articles Exclusive! Don’t forget to say you saw it at Ezine! Stay tuned!

Copyright © 2006

James W. Hart, IV

All Rights reserved

Real Estate Agent Tips

Few felt the financially tragic effects of our economic collapse in a way similar to commission-based real estate agents. Many aim to endure the economic storm with hopes of brighter days to come; however, if agents ignore the market shifts, the sun may never shine again. Changes are many and all of different origin, some direct and others indirect; regardless, time to assess what has happened, forecasting what is to come. In doing so, agents will understand the new dynamics, increasing the ability to flourish in the new real estate climate.

Let’s begin with legislative changes and progress to shifts in consumer mentality. After reviewing both, we will analyze what adjustments in your approach to business are necessary to survival, and moreover, how to take profitable advantage of the situation. The financial overhaul bill (that passed through the senate on July 15th) carries with it a regulation preventing banks from acquiring Credit Default Swaps for mortgages. CDS’s are used to protect banks from default on loans. The protection once allowed banks to provide mortgages to more people with less risk. Next, the new Consumer Protection Financial Bureau will oversee mortgage bonds and examine banks. Our mortgage giants, Fannie Mae and Freddie Mac, who are responsible for 90% of American mortgages, will undergo restructuring, including increased regulation. The government threatens to break apart companies of great size who influence bank lending in some fashion. Do not be misled by the apparent simplicity of these regulations, as the results carry deep influence, penetrating the entire economy.

Since 2007, the state of our economy has crippled and struck fear into the hearts of many Americans, stimulating action from our elected officials. Individuals superficially recognize the steps leading up to our economic misfortune, though a general lack of profound understanding blinds most from recognizing and predicting what such drastic changes will do to consumption spending in our real estate market. Also, there is a heightened fear of home purchase, as many of the players on the way to acquiring a mortgage have been exposed as untrustworthy. All things considered, mortgages will now be much harder to acquire, while Americans are hesitant to buy. The buyers market will be a mere fraction of its previous self.

The turmoil has left real estate sales people caught in limbo, expecting the market to pick up at any minute. However, these new regulations will prevent a quick pickup, regardless of low prices and interest rates. Furthermore, the liquidity in real estate will dissipate. Why? Limiting the actions of Fannie and Freddie constrain the secondary market of mortgages, diminishing a large portion of mortgage activity. Next, removing Credit Default Swaps will force banks to decline individuals who seek mortgage funding – the same individuals who, in the past, would not be concerned with potential rejection. Combined, the effects will reduce the number of loans available to the public AND eliminate the majority of house shoppers, leaving few people with the means, capacity, and willingness to purchase real estate. Regardless, many houses are for sale, and they will eventually be sold. Also, everyone needs a place to live, regardless of mortgage availability. Now that we, in general, see the current and future changes, it is time for my friends, the real estate agents, to capitalize.

Lets rationalize. Loans, for those who can get them, are very inexpensive thanks to the extremely low interest rates. Property is priced very low (thanks to lack of demand), though few can access enough cash to buy. I warn you, DO NOT just blindly expect the market to pick up naturally. Furthermore, when it does pick up, nothing will be the same.

Who are the future buyers?

Cash-rich individuals or companies with strong financial histories will dominate property purchase. The new regulations are designed with a common goal – eliminating risky mortgages to risky borrowers. Expect property purchase primarily from investors. More specifically, investors will dominate the market, as they have the cash to take advantage of low interest rates. Furthermore income property will dominate investment purchase. Investing to “flip” property will no longer be a profitable endeavor, as it will be difficult to find buyers to flip the house to, considering the reduction of the buyers market. Also, houses will trade hands less frequently, so the opportunity to consistently earn commission on sale may fade. Lastly, those unable to qualify for loan will likely become part of the renting population – income property will take over the market! Remember, it’s income property investors who will buy, and renting will increase. Use these forecasts to your advantage.

How to appeal to future buyers

The houses for sale now will eventually sell, though not often, as the loss of real estate liquidity will pit agents against one another in the battle for the dwindling number of listings. In addition, finding buyers will take more time, meaning greater delay between paychecks. Regardless, the easiest sale will be to income property investors.

I suggest situating yourself in an area with a strong renters market – housing statistics are available online for every U.S. city. Find cities close by with many renters. Personally, I suggest areas surrounding colleges and universities, as rental demand rarely declines. Highlight your property listings with the most desirable cash flows. You will serve yourself well to learn to value cash flows with varying rent and occupancy levels. Next, you should learn of the best options to acquire appropriate financing for buyers. The financing terms are critical to ensuring a profitable investment, and if you provide investors with all the info necessary to succeed, chances of sale will skyrocket.

Market your units/houses with detail regarding the cash flows: probable rent, average rent in the area, property taxes, HOA dues, capitalization rate (if done properly) etc. Also, investors are not always located in your area, so advertise online by making your own website and blog, cross promoting with other real estate blogs or investment websites.

Add new activity to your business

It is time to begin managing properties for your investors, for multiple reasons. Firstly, houses simply will not turn over at the rate they once did, leaving you with fewer commission opportunities. Secondly, if your primary clients are investors, the opportunity to manage the purchased property will likely present itself… frequently. Take advantage! With the added income from managed properties, no longer will you claw for sales, desperate for commission checks. Naturally, you will face added competition from real estate agents with the same idea, but provide a competitive advantage by streamlining your management business – use online software. Property management seemingly missed the technological revolution, stubbornly maintaining archaic methods of collecting payment and handling tenant relations. Lower your service fees with increased efficiency. Handle all tenant relations online, and manage your rentals from any locale. Live a good life!

This message is not intended as a means to relish in bad news; the intent is to provide a heads up to those agents still waiting for the old way of operation to suddenly click once again. New laws will not allow your business to operate as it once did, so stay ahead of the game, and take advantage of the recent and upcoming shifts in Planet Real Estate. Rentals, rentals, rentals! That’s what it’s all about now, so make sure to adjust your sales techniques and your daily activity, or be a casualty of this economic battle. This is not a guess or a wild attempt to predict the future – it’s the law. Heed my advice, and, again, live a good life.

Are You A New Real Estate Agent? Tips to Keep You Growing

Beginning a new career as a real estate agent can be stressful, overwhelming and sometimes even intimidating. There are so many things that happen all at once; brokerage classes, preparing marketing materials, drawing up a business plan, selecting vendors and more. Here a few real estate agent tips to help guide new agents like yourself through the beginning steps of becoming a successful agent.

1. It’s OK to Start Small.

When you’re new to any project, it’s tempting to daydream about what your future successful business will look like. Then you’ll want to spend thousands of dollars to get a high end website and blog, all the glossy advertising you can manage and any other costly gimmick you think will benefit your business. The trouble is hard work and advertising alone won’t make you successful. Just like any other business, cash flow is the most critical component to success in the start up years. 

Plan for success to take longer than you expect and give yourself a margin of error. Consider the less expensive options for your start up needs and gradually work your way up to the premium items you would like further down the road. Resist the urge to overextend your finances or you may find that all the great real estate tips on the web are no help as your brand new business sinks in red ink. 

2. Hire a Coach or Find a Knowledgeable Mentor.

Nothing can replace the value of actual hands on experience gained from sitting in on a listing presentation with a successful veteran. Watching and learning from an experienced agent is one of the most valuable real estate agent tips you can get if you re just starting out. Consider working as an assistant to someone you respect and admire. And learn how to model your own practice on theirs. This will save you countless hours of missteps and years of bad decisions made in ignorance.

It would be foolish for your first experience with a listing presentation to be one in which you are the presenter. Those opportunities are too scarce and far too competitive to waste on your inexperience. Find a reputable and longstanding professional and follow their lead.

3. Be Doing From Day One.

This is the most practical of today’s real estate agent tips. It’s so easy in the early phase to plan and dream of success rather than actually doing anything. But if you jump in and get hands on experience as soon as possible you will fair much better. Call your friends and family members and let them know you’re in the real estate business. They’ll want to work with you because of the relationship that already exists, and they can be a wealth of referrals. 

The fact is that calling is hard–even to people you know. The sooner you start making calls, the faster you’ll become comfortable with them.

Hopefully these top three real estate agent tips for new agents are helpful. There is much more in depth information out there, but keeping these three at the top of your priorities will certainly help guide you along the way.