You find yourself in need of a Commercial Real Estate Broker. What now?
Currently, barriers to entry and attrition are reducing the commercial real estate (CRE) talent pool. It is increasingly difficult to break into the industry and it is even harder to survive. Yet, as a client, you should feel like you have the absolute best broker for whatever your specific need may be. So how do you go about selecting a talented, persistent broker amidst everyone else out there?
There are a few scenarios that may characterize your search for a broker:
SCENARIO 1:
You may already “know” someone in the industry. Yet there is a big difference between “knowing” someone and trusting them to do a good job. But maybe that is enough for you, so you hire them without asking questions or interviewing others and hope they do a good job. Good luck!
SCENARIO 2:
You may “know someone who knows someone” and will take a recommendation or referral for a good broker. However, comparing one broker to another may be akin to an apples and oranges comparison. Many brokers are “generalists” and do everything in the world of CRE. You can also find a broker that is more specialized and better equipped in one area or sector of CRE. Know what you need and find someone that excels in that area. If you are looking for a retail space, you may be better served by a broker who primarily works with retailers. If your need is specialized, find someone equipped in that particular area or sector of CRE.
SCENARIO 3:
Maybe you have “heard of someone” from perusing Google, seeing their signs on buildings, or listening to your Uber drivers recommendation. Regardless of how you heard of them, you must be aware that you have more than one option when it comes to choosing your CRE broker. More importantly, it should not be an arbitrary decision. It should be intentional, thought-out, and well researched. Our best clients did not throw darts and land on us, they made us fight to win their business- they vetted us out, and made us prove our worth prior to engaging our services.
THE RIGHT QUESTIONS & QUALITIES WHEN CHOOSING A BROKER
It is important that your broker has the right qualities, tools and technology to get the job done. CRE can sometimes carry a reputation or stigma of being a bit of a tired industry. The truth is far from it- CRE is highly innovative and disruptive. KNowing how to use a computer isn’t enough. Brokers should also be able to access the widest array possible of tools and market data. CRE has kept up with technology- having a robust tech stack is absolutely mandatory. Your broker should also have the necessary personality traits and work habits required to get the job done. Here are a few of my suggestions for what questions to ask and what tools and qualities to look for.
“What listing and data sources do you have access to? (As it relates to paid services)”
As a client, you should be aware of the value that you are getting from your client/broker relationship. Does your broker have access to local (NCCIE) or national listing websites (Loopnet/Costar)? I sure hope so, as that is the most basic need to widely market your property or prospect for your needs. Where else do they make a listing available or access data from? Any brokerage can have a website, but is theirs positioned in a way that actually showcases and enhances the appeal of your property? Or, does it lend credibility to your brand having others know this is the company you have chosen to place your trust in?
“Which data mining tools do you use? How are you using them to benefit your clients?”
“What paid advertising are you carrying out for your properties/clients?”
“How do you keep up with contact management?”
“How do you track your database of clients, prospects and activity, including outreach to your network?”
If their answer to the latter is Microsoft Outlook, I would start sweating. We use REthink CRM through Salesforce to track our clients, tenants, contacts, and prospects. We use Constant Contact to send out listing and general brokerage information. This year, our Marketing team implemented Hubspot for our blog and social media. They are working to link Hubspot, REthink and our ESP so that we have one central place for contacts and communication. Regardless of which of these, or other services, being used, you want to ensure that they have a robust system and platform in place.
“Tell me about your administrative and marketing support – how are they aligned with helping you to help achieve the needs of your clients each and every day?”
Also, pay attention to your overall interface/interaction with your broker. What about their office and meeting environment? At the most basic level, ask yourself: is this the person best suited to represent me, my company, and my interests?
“At the most basic level, ask yourself: is this the person best suited to represent me, my company, and my interests? “
Communication
Communication is also very important to the CRE client-broker relationship. Be sure to set expectations on both sides as to how often communication should occur. The number one complaint for real estate brokers of any kind is lack of communication. Sometimes real estate can be a very slow moving process, but I make it a policy to reach out to all clients even when my update is that there is no update. There is no worse feeling than placing your faith in someone to take care of your needs and not hearing from them for 3+ months.
Persistence
Be sure to gauge your broker’s level of persistence as it relates to their ability to hustle and hit the pavement. Are they aggressively cold-calling, sending out mailers, email blasts, etc.? Maybe you connected with them from a cold-call ? that is a good thing! That means they are hitting the phones and drumming up interest not just for themselves, but also for their clients and their listings.
Reputation
Lastly comes reputation. In smaller markets, such as Winston-Salem, reputation is something you cannot get away from. Be sure to ask for references from your broker. They should have several clients more than willing to provide at least a few minutes of their time to share their experience. If someone is happy, or unhappy for that matter, with a broker’s services they are usually enthusiastic to share.
I hope this proves useful, shining some light on what should be important from the client perspective. Hopefully this helps both clients and brokers take a step back and analyze their best practices and habits moving forward.