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Buy Home - $650.000 |
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The following approach and points of focus will help direct you on the correct path with the client.
1. So what is the Owners main motivation in the sale? Are they under financial pressure or do they simply need to create change with their investment properties and for what reason? Sometimes the mix of an Investment Property portfolio requires more stability or direction. Whilst diversification is a great strategy to spread the risk for a property owner, it also lessens the potential of faster growth in the portfolio.
2. What do they ultimately want to do in bringing the property to the market? Their motivation could be to obtain cash, remove risk, or invest elsewhere. Clarification on this issue is essential and will allow you to focus down on the real solutions required.
3. Is there a critical time frame to transact the sale? In most property markets, the time frame to transact the sale is at least six weeks in commercial real estate. When the market is under pressure and times are more difficult, it is likely that the property promotion could take between three and six months. The vendor to the property needs to accept this time line from the earliest stages of listing. Any property that takes longer than six months to sell will likely have an underlying problem which buyers will not accept. In such circumstances, it is better to take the property off the market to prevent it becoming stale. A new marketing campaign can be constructed at a later time and to a different target market.
4. Is there a financial problem or target or hurdle that must be addressed in the sale? Financial hurdles are quite common at the moment in most countries given the Global Financial Crisis. Both time and price are critical to the property promotion in such circumstances.
5. What rents are being asked for the tenants in the property? Are they realistic and will they impact on the target market or the interest of buyers? Property leases and rental structures will impact the sale process. This says that you need to review all leases and remove any weaknesses in the documentation before the property is promoted for sale. It is quite common to renegotiate leases and removal weak tenancies prior to sale.
6. What is the Owner's relationship to the tenants like and will that impact the sale? It is interesting to note that the potential buyer to a property will generally talk to the tenancies prior to considering a final purchase. The buyer will know that the tenants can offer valuable information and history regards the property.
7. Does the owner understand the commercial property market trends and recent sale activity in the area? There is no point proceeding into a new proposal and property sale promotion based on the current market trends unless the client fully accepts the status and stability of the current market. Providing details of comparable properties and time on market will help with this process. Give full details of the regional sales and leasing activity of the last 12 months.
8. Is the owner a Corporate Business and does that affect the decision processes or delay sale? Corporate property owners and large private companies invariably have a number of people or a board of directors that deal with the property solution and decision. This can take days if not weeks and delay the decision process. From the earliest stages of the listing and property promotion it pays to understand how any decisions will be made. Get to the client to agree to some process' which will fast track any decisions you need. Property buyers do not hang around forever. When a there is an abundance of listings available, they will move to other properties and make offers quite easily.
9. Who are the Owner's Solicitors and Accountants and how will they get involved in the processes of negotiation and sale? Professional services and advisers to the client need to be identified and respected. Find out who they are so that you can integrate them into any decision and all appropriate documentary processes.
10. Who is the Owner's financier and what are the obligations or mechanism of discharging the mortgage? The property owner should be able to assist the process of mortgage discharge. Ensure that you know how much money is required to complete their discharge of the mortgage in an efficient way.
11. Is the owner of the property a repeat buyer or seller of other property? Ideally you would like to offer them a further selection of property investment alternatives at the right time. This is where your expertise and specialty in the local area is invaluable. If they wish to invest outside of your local area, then seek out the assistance of a well qualified and specialist commercial real estate agent elsewhere.
12. Do they own anything else currently and will that also need to be addressed in the near future? Are happy client will invariably use your services again. One of the greatest advantages in commercial real estate agency, is that the investors will frequently transact for new properties. Many real estate agency salespeople will be on the lookout for investments of a particular type for the clients that they serve. This creates the off market deal that is not publicized openly through the media.
So these 12 key issues and points of questioning will allow you to get to the clients motivations. In this way you can direct your proposal and strategy in a competitive way. Winning the proposal process is not based on discounting your commissions or fees; it is based on matching the client to the market.