Keep an eye out for those agents at "Rapid Realty"
Before stepping into a relationship with a commercial real estate firm, a person must be apprehensive. The following are 13 pitfalls to avoid when selecting a commercial/industrial agent.
1) "We don't need an agent from an outside firm because the plant manager's brother-in-law has a real estate license."
That's great so long as the brother-in-law is a qualified specialist in your area and type of property and if his company has the reputation and the resources to handle the job successfully. However, if things don't work out, can he be fired gracefully?
2) "The agent at 'Rapid Realty' says he can sell my property in just three weeks."
Then why is his company asking for a six month listing? Even the best agents can't predict how long it will take to sell a property, but making it happen quickly depends on correct pricing, a comprehensive marketing plan, and energized salespeople with the expertise and the desire to carry it out.
3) "The other agent quoted me a higher price for my building so I'm going to list with him."
This little number is called "buying a listing." All too often, the overpriced property will sit with little or no activity until the listing expires, and the then-desperate owner lists with a new broker at a lower price.
4) "Signs from 'Profusion Properties' are everywhere. They must be good."
Truth is they may or may not be good. All you know for sure is that they have lots of listings which haven't sold or leased yet. Make sure your agent is also making cold calls, sending out mailings, cooperating with other brokers, and that he isn't too busy with all of his present listings to put the necessary time and effort into yours.
5) "My accountant says he knows a good agent."
Many agents pay finders' fees to accountants, lawyers and others to make recommendations that get them listings. If the referred agent specializes in your requirements and can do an effective job, that's fine, but don't be pressured into hiring someone because of his of her connections to your other business associates or vendors.
6) "I want several agents looking to make sure that I find the best building."
In our trade, this is known as an "Easter egg hunt." Any experienced agent knows that these clients offer more frustration than money and would much prefer to spend his or her time and energy working for a loyal client.
If the building you want is already on the market, any good agent in your area can find it. If it isn't, you would be better served to pick the best agent you can find to exclusively represent you. Assured of earning a commission when he or she is successful, the proper amount of time and effort can be spent to search for it, and also to broadcast your requirements to owners and to the brokerage community.
7) "I found an agent who will work for only a 2 percent commission."
Such an agent knows better than anyone else what his services are worth. If he has made a habit in the past of accepting low commission, you can bet his listings do not get the best cooperation from the brokerage community.
8) "I want to work with a brokerage that advertises heavily."
In our experience, unless a buyer or tenant is looking for an investment opportunity, he is more likely to call a qualified agent than he is to scan the newspaper for commercial real estate ads. The company or agent that relies too heavily on newspaper advertising is not doing justice to its clients.
9) "According to 'Stampede Real Estate' lots of people are interested in my property."
If this were true, why don't they just bring you the offers? They wouldn't need a listing to market the property to clients they already have. In truth, this is just a sales pitch and you should be more interested in how they are going to reach tenants and buyers they don't already have.
10) "This agent has sold or leased more than 5 million square feet of property. He's the one for me."
Well, at least the guy has experience. However, ask yourself if he is still hungry and energetic enough to do the hard work needed to meet your requirements. Will he turn it over to one of his trainees? If that's the case, his awesome resume won't count much because you will actually have a junior agent handling your real estate needs.
11) "I don't want to tie my property up with any one agent."
Given all the wrong ways to select an agent, this may seem like the only safe approach. However, if you don't list, the small group of agents who become aware of your property will be very careful not to expose it to the public at large and especially not to other agents. Unfortunately, the best way to "tie up" your property is to limit your exposure by not listing.
12) "I don't want to pay a commission."
Keep in mind that almost every buyer or tenant is going to call a broker to find the property for him. The few who go looking on their own do so because they want to save the commission, obviously at your expense.
13) "I'd rather just do it myself.
Do you service your Mercedes or tackle major home improvements on your own? Well you might, but most of us would rather rely on the skills of experts. As with auto mechanics, contractors, commercial real estate agents, and dozens of other professionals, you may have had some bad experiences. Maybe you spotted a culprit or two from your experiences on our list.
In the future, may we suggest you select a company with an established reputation for integrity and professionalism, and that you pick an agent from that company who specializes in your area and type of property. He or she should have a track record of success and a comprehensive plan for handling your specific real estate needs. If these "musts" are met, you might just find that the "necessary evil" of dealing with real estate agents can actually be a pleasurable and profitable experience.