This column is offered to help educate agents new to commercial and investment brokerage and serve as a review of basics for existing practitioners.
To be successful in real estate you need to have the right attitude, understand the numbers, have a goal and follow a plan. Attitude is everything; you must meet every client and customer with enthusiasm, confidence, demonstrate your market knowledge and be the winner they want to hire.
What do you expect to achieve in 2018; what are your business financial goals and your personal life goals? Goals must be thought about and then written down: when you write something down it enters your sub-conscious mind, creating a constant reminder of what you want to achieve. Once a goal is set, a plan must be developed to accomplish it.
In real estate, the plan to achieve your monetary goal focuses on how many listings do I need, how many sales and leases do I need to close? To begin these analyses first determine how much money you want to make next year? Next examine your market, what is the average sales price of commercial buildings and size and terms of typical leases. Figure out what would be your typical net commission after co-brokes and splits with your firm. Now translate that to the number of sale and leases you need to do next year to accomplish your goal.
If you want to close 12 transactions how many listings do you need to get? What is your closing ratio; do half of your listing sell or lease? If so you need 24 listings next year, plan on obtaining two a month. How many listing presentations do you need to go on to get an exclusive listing; one out of two a 50% listing ratio? So to get our 24 listings we need to go on 48 listing presentations, four a month, or one a week.
These numbers now become the basis for your production planning. Work backwards from your total transactions required for the year; break it down by what you have to do each month, each week and each day to reach your goal.
Of all of ways you used to build your business this past year what marketing techniques worked best? (You are tracking where every lead comes from, right.) Are you working these programs: announcement letters with phone follow up calls; newsletters (print or email); target mailings; referrals from residential agents and past clients; networking at commercial organizations, Chamber of Commerce and service club meetings; working trade shows; cold calls; telemarketing; leads groups; advertising; website marketing or social media? If you joined an organization and are getting no business from the members try a different group. Not every marketing technique works in every market, if a program does not work for you do something else. Albert Einstein defined Insanity as “Doing the same thing over and over again and expecting a different result.”
Real estate has always been a people business. To succeed in 2018 we must focus our skills on people. Finding new “people” is the first step but then we must convert them to clients and customers. This is done by demonstrating our superior market knowledge and communication skills.
Market knowledge – assume your client knows every listing that is posted on the various web sites; what can you tell them they cannot find out for themselves? Do they know local zoning rules or proposed changes, mortgage requirements, or about capital gains taxes or 1031 exchanges? County or state economic growth programs, available tax credits, energy rebate programs, what can you tell them about green building concepts or green leases?
Communication – assume everyone is high tech and wants the answer now! When you’re listing property, interview the owner, get the answer to every possible question the buyer or tenant may ask. Be sure you are ready to communicate at every level. How are your texting skills, how many times a day are you checking your e-mail?
More than ever we need to get out into the community speaking with business and building owners. We must devote some time each day to prospecting, expanding our own knowledge base. We must be excellent communicators, having the knowledge and getting back to our consumers as fast as possible. That’s what it will take to be successful. Good luck!
Edward Smith, Jr., CREI, ITI, CIC, GREEN, MICP, CNE, is a commercial real estate consultant, instructor and broker at Smith Commercial Real Estate, Sandy Hook, CT.