In this commercial real estate market, you really get to know the property owner you are dealing with and their reason for talking to you about property matters.

As a basic strategy, it is worth asking the client directly about their needs, but also, and perhaps more importantly, about their knowledge of the current market. You want all the real facts and make sure you don’t get hidden agendas from clients. So let’s see how we can achieve this clear and accurate customer information.

direct examination

Ask them more and talk less! Direct questions lay the foundation of trust and insight for you in the conversation. It sets you apart from the competition as the real estate agent of relevance and knowledge. The property owner can see that he is talking to someone who really knows the current market and why things happen.

Here are some key questions and concepts. We recommend that you use this as a checklist for the process. That will keep you on track.

  • What is the owner’s motivation in speaking to you today and how did they contact you? They must have at least one specific reason. You need to know why they have chosen you as a potential agent to help them. You should also know how they found you in the first place. If it was through another ownership campaign or a referral, then you have a base from which to build influence.
  • In this commercial and retail real estate market, volatility and uncertainty can affect many properties. The time on the market will be long in most circumstances, unless the property is a good match to the target market and the price or rental is well structured. For this reason, you want the best properties listed with you and not the average ones. What do clients ultimately want to do by listing the property today and what is the time frame they must meet?
  • Are there any financial hurdles or benchmarks that need to be overcome for the transaction to be successful? If there is any financial pressure from mortgagees and banks, it is important to know all the details about it. See if the client will involve you with the banks in the early stages so that any pressure from that direction can be checked. If the bank trusts you and their services, they are likely to enable you to make decisions on the property development path ahead.
  • Given the price or rent you could achieve with the property in today’s market, are there any financial goals or hurdles on the client’s mind that need to be matched? Is it realistic and what will your strategy be in the process? Work on customer thinking from the early stages of the quoting process. Inflated price and rent attitudes need to be tempered. The real estate market this year is very different from two years ago. Don’t waste your time on listings overpriced at unrealistically high levels.
  • Has the property been on the market for some time with other agencies? This fact will affect its strategic approach to continue trading today. You will need to update your marketing so that previous promotional campaigns do not affect your current campaign.
  • The previous history of the owner’s interaction and service with the other tenants in the building must be identified and understood. Many prospective buyers or prospective tenants of the property in today’s market will speak to the other existing tenants in the property as part of their due diligence process. Any bad story can derail your negotiations. The sooner you know about the problem, the easier it will be for you to strategize and address it.
  • Since there are so many changes affecting the market right now, does the property owner understand the market and how to adapt to those pressures? This may include property renovation, rent adjustments, establishment of new lease documentation, repositioning of leases, a reassessment of property finances, well-targeted marketing campaigns, and reductions in price or rent as needed.
  • Is the property owner a ‘Corporate’ structure and how does that affect or delay decisions that will appear in the sale or lease process? It’s amazing how much delay you can experience when working with boards of directors and people in ‘front office’. Property paperwork should be a high priority and follow up quickly when the time comes. Understand who you need to give the documentation to and how they will process it.
  • Who are the owner’s attorneys and accountants? Can they be contacted directly to discuss the financial issues of the property? It is interesting to note that lawyers in the property documentation process can slow things down a lot (the pressures of their workload are not their pressures). This is where you will probably need the assistance of the client in order for the lawyer to respond in a timely manner to your requests. It is very likely that the lawyer will not even answer your calls as a real estate agent until the client indicates so.
  • Given the current real estate transaction, is the client a regular investor and will they want to re-enter the real estate markets soon with a different type of investment? This is an excellent time to purchase other commercial real estate. Prices are historically low and offer a significant opportunity for those clients who can act today. Finances can be the problem that slows down the most important operations.
  • Does the client own anything else in commercial real estate that needs to be balanced against property portfolio performance as the subject property is sold or leased? In many cases, it is the stability of the cash flow in the portfolio that must be considered for the client. Many wise portfolio property owners will select properties in different property types, such as retail, office, and industrial, so that the economic trends of any distressed market segment or location are offset by the other properties in the portfolio. It should be noted that various property portfolios produce less volatility but also produce less extreme spikes when a property market is performing strongly. Today’s property owners who are reasonably comfortable financially are those who have spread their investment portfolios across different types of properties in good locations.

So the key issue here is to fully understand the customer and their needs. The better you do it, the better the chances of an effective sale or lease in a timely manner. Confidence and control are the foundation of your success as a commercial real estate agent in this volatile real estate market.