Commercial Real Estate Negotiation - How to Stay Ahead of the Game

Every day in commercial real estate you are negotiating about something. It could include any of these:

• Commission rates
• Advertising money
• Marketing strategy
• Gaining the listing
• Tenants in a new lease
• Buyers in a new contract
• Getting an appointment to present your proposal

The most important element of negotiation is that you adopt a fair, honest, and open approach. All too often we come across sales people in the property businesses that are less than honest all of the time. In the long term they do not last and do not take market share.

Not only are there some 'poor quality' people working in the industry but there are certainly more than a few of them on the client's side of the fence. These are the ones that show you little respect in full and open communication, give you difficulty in feedback or property detail, and do not come back to you in a reliable and honest way. In one word they are dangerous.

A question was raised recently by a property agent, 'Should I continue to work with a client that was devious or dishonest?' It's a good question, and the answer should really be taken from the circumstances as you see it. After all a client that is not cooperating or honest is one that you probably cannot trust, and certainly one that can get you into trouble through misrepresentation or negligence in giving you all the facts. Remember that people like to sue real estate agents and brokers at the drop of a hat. That doesn't mean that they have a valid claim to do so, but it does mean that they have a lawyer who sees opportunity.

Let's assume that you do everything by the book and correctly. That is the only way to do business as a real estate agent and broker. But you will have to also apply some 'safety strategies' to help you in daily business.

Try some of these for ideas and add them to your list of processes in your business:

• Keep accurate notes of all negotiation discussions
• Expect that the information you are given is not total and is potentially not accurate, so check it through independent actions and follow up.
• Keep notes of all information given to you by the parties to the property transaction
• In the listing phase of the property marketing, be diligent and direct in getting all relevant information from the client
• Confirm all verbal discussions and instructions back to those that advised you of the facts and any actions that they want you to take.
• When any doubts exist, stop and check the information before you act on it.
• When someone threatens legal action, advise your insurers immediately
• Make sure you have sufficient insurance cover both in professional indemnity, and also public liability.
• Create a series of best practice models for your real estate business in listing property, negotiating the deals, inspecting property, legal and contract documentation, and closing to a settlement.

In all commercial real estate negotiations, professionalism, persistence, and diligence are critical to closing the deal and moving it to finality. The character nature of many sales people in any industry is such that attention to detail is not always part of that process. Make sure that your processes are of the highest quality when it comes to property sales and leasing. That will support you and keep you successful. Good clients want to do business with the best real estate agents and brokers, not the ones that are in constant level of 'damage control'.