Property Brokers The Road To Success

THE ROAD TO SUCCESS

A GUIDE TO COMMERCIAL REAL ESTATE

Property Brokers Limited MREINZ Licensed under the REAA 2008

COMMERCIAL REAL ESTATE The Road to Success Table of Contents

Commercial Real Estate — The Road to Success Welcome........................................................................................................................................ 3

Keys to success............................................................................................................................... 3 SWOT.............................................................................................................................................. 3 Knowing yourself is the first step

The office....................................................................................................................................... 4

Time management........................................................................................................................ 4

Plan your day................................................................................................................................. 5 Education....................................................................................................................................... 5

Social media................................................................................................................................... 5 Personal

........................................................................................................................................................ 6 Understanding personality types

........................................................................................................................................................ 7 Getting started

........................................................................................................................................................ 7 Getting new listings

........................................................................................................................................................ 8 Appraisals

Preparing an Appraisal................................................................................................................. 9

If your vendor requires time to decide...................................................................................... 10

If ‘No’ to a listing......................................................................................................................... 10

If your vendor lists with another company............................................................................... 10 Submissions.................................................................................................................................. 10 Pricing

.......................................................................................................................................................11

Businesses and Hotel/Motel listings............................................................................................11

Telephone technique.................................................................................................................. 12

Cold call phoning........................................................................................................................ 12

Door knocking............................................................................................................................. 13

Converting vacant buildings to sale buildings.......................................................................... 13 Securing a listing

...................................................................................................................................................... 14

Prepare an Appraisal folder....................................................................................................... 14

Prepare a Listing folder to Include............................................................................................. 14 Salesperson.................................................................................................................................. 14

During the agency....................................................................................................................... 15

Tenanted properties................................................................................................................... 15

Silent listings................................................................................................................................ 15 Advertising & Marketing Brand............................................................................................................................................ 16 Photography................................................................................................................................ 16 Marketing.................................................................................................................................... 17 Advertising.................................................................................................................................. 17

Information Memorandums....................................................................................................... 18 Signage ....................................................................................................................................... 18 © 2013 Property Brokers Limited

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The Road to Success in Commercial Real Estate

Buyers and sellers

Finding sellers.............................................................................................................................. 19

Finding buyers............................................................................................................................. 19

Commercial real estate competitors.......................................................................................... 19

Managing buyers........................................................................................................................ 20 Qualifying purchasers

...................................................................................................................................................... 21

Showing properties..................................................................................................................... 21 Objections.................................................................................................................................... 22 The selling process

...................................................................................................................................................... 23

The Vendor.................................................................................................................................. 23

The Purchaser.............................................................................................................................. 23 Capacity....................................................................................................................................... 23

Legal description......................................................................................................................... 23

Price and deposit......................................................................................................................... 24 Settlement................................................................................................................................... 24

Tenancy details............................................................................................................................ 24 Clauses......................................................................................................................................... 24 Presenting an Offer

Precondition where you can....................................................................................................... 25

If NO............................................................................................................................................. 25

Positive language........................................................................................................................ 25 Negotiating

...................................................................................................................................................... 26

Ensure you have agreement....................................................................................................... 26

The four essentials of negotiating............................................................................................. 27 The Close

There are four responses to a close........................................................................................... 28

Under offer - conditional............................................................................................................ 28

Day to go unconditional............................................................................................................. 29

If not sold..................................................................................................................................... 29

If sold - unconditional................................................................................................................. 29 Settlement

Chattels check.............................................................................................................................. 30 Insurance...................................................................................................................................... 30 Rent.............................................................................................................................................. 30 Administrator.............................................................................................................................. 30 Salesperson.................................................................................................................................. 30 Gifts.............................................................................................................................................. 30

For Sale/Lease Sign...................................................................................................................... 30 Database...................................................................................................................................... 30 Maintaining the Business

...................................................................................................................................................... 31 Referrals....................................................................................................................................... 31 Goals............................................................................................................................................. 31 Plan for the Future

Year 1........................................................................................................................................... 32

Year 2........................................................................................................................................... 32

Year 3........................................................................................................................................... 32

Year 4 Onwards........................................................................................................................... 32 Summary

...................................................................................................................................................... 33

Property Brokers Limited MREINZ Licensed under the REAA 2008

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The Road to Success in Commercial Real Estate Welcome to Commercial Real Estate.

We hope this booklet provides a base from which to start your business and answers most of the questions that will surface along the way.

This is an exciting business that provides freedom of time, financial security, property knowledge and both professional and personal relationships that will last a lifetime.

You are self employed and your success in real estate is entirely self-determined.

Property Brokers is the banner under which we operate. The firm offers creative marketing, a strong company and a generous employment contract, but ultimately, agents only ever “reap what they sow� regardless of which firm they work for.

Keys to success Database Quality Sole Agency listings Signage Building Relationships Honesty and Integrity Attitude Customer Service

Time Management Business Plan Goals and Objectives Qualifying Networking Personal Profile Education

The five biggest mistakes 1.

2.

3.

4.

5.

The lack of a reason to work Not taking the business seriously No business plan No accountability Poor time management

S.W.O.T. Strengths

Outline your best qualities, your assets

Weaknesses

Outline some aspects of your nature that let you down

Opportunities

The areas of yourself you are developing and improving

Threats

The areas you need to be careful of, if you want to achieve change Use the same analysis for each property you list

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The Road to Success in Commercial Real Estate

Knowing yourself is the first step The Office If you want to get paid, there are only 3 places a salesperson should be: 1) 2) 3)

At a listing presentation Out with a client Presenting an offer

The time spent in the office should be limited to the paperwork, computer work and phoning you need to do. Go and talk to people, build relationships and get quality sole agency listings with vendor paid advertising.

Time management Master the 2 minute phone call Say no to unimportant things Be specific about outcomes and issues Never leave a task or decision incomplete Eliminate the 5 most common distractions Organise your tasks into 30 - 60 minute lots Have an ideal week in place Be punctual Be courageous, avoid procrastination Plan your calls geographically Proper preparation Confirm appointments Go shopping all at once and group errands Avoid fatigue What do I do to waste the time of others?

WORK As Real Estate agents all we sell is our time

Property Brokers Limited MREINZ Licensed under the REAA 2008

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Plan your day Coming to the offices of Property Brokers on a daily basis is not ‘working’ as a Real Estate Agent. You are a Sole Trader that must take responsibility for your performance. Be greedy for deals.

8.30 am - 9.30 am 9.30 am - 11.00 am 11.00 am - 11.15 am 11.15 - 12.00 pm 12.00 - 12.30 pm 1.00 - 3.30 pm 4.00 - 5.30 pm

Internal meetings Phone calls and emails Administration, advertising, mail, break Property, cold calling Lunch Pitches, inspections, two appointments Coffee break, pre-planning, letters

A typically productive agent will complete all telephone calls prior to 11.30 am. At this time all their correspondence, new listings, IM’s, submissions and emails should have been done. This allows the balance of the day for appointments and prospecting. A return to the office by 4.00 pm allows the agent the chance to plan the forthcoming day.

Your day is likely to be full of interruptions. Treat your time as appointments and try to stick to them. Ensure you don’t constantly interrupt other agents in your office.

Your aim is to spend your working day as productively as possible to ensure the best possible chance of meeting your financial goals.

Plan your work for today and every day, then work your plan Margaret Thatcher

Education Take advantage of any courses, seminars or workshops that are on offer Read books on a variety of topics Search out great websites:— www.salescoach.co.nz www.johnshack.com www.interest.co.nz www.successinmind.co.nz www.johnabbott.co.nz www.propbd.co.nz www.interest.co.nz

Social Media Being socially connected has a far wider impact than normal marketing – interviews, FaceBook, Twitter, videos – these are game changers on your personal website.

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The Road to Success in Commercial Real Estate

Personal Your vehicle

Clean, tidy, take out commercial insurance,

invest in a hands free kit

Keep torch, tape measure, business cards,

camera, map, listing pad, pen and paper

Mobile phone

Smart phones work in tandem with your computer. Check out deals on Intranet

Laptop and iPad

Check Intranet for deals to lease or buy

Camera

A modern, compact digital camera with wide angle lens and flash

Diary

A large diary on your desk is essential

Your wardrobe

Be the best dressed - clean and classic

Fitness

Strive to be physically and mentally fit

Personal time

Pick yourself half an hour a day to enjoy

Public speaking

Join Toastmasters

Mastermind group

Form a focus group with 6 different professionals and have bimonthly coffee meetings for sharing of information

Start right now, make this your best year ever!

Property Brokers Limited MREINZ Licensed under the REAA 2008

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Understanding personality types Knowing the personality type of the customer you are dealing with will help you build trust and a business relationship faster.

It also gives you the opportunity to change your presentation quickly, giving you a greater chance of success today and of walking out with the listing.

The Expressive Client

(friendly and smiles often)

The Driver Client

(the face and the pace)

The Analytical Client

(serious and matter of fact)

The Amiable Client

(actions are cautious or slower) Mirror the client

Getting started

9

Post office business box drop

Targeted flyer drops regularly

Build Databases

Categorise in Property Suite

Entertaining

To develop relationships – coffee, lunch

Personal profile

Create your own A5 CV profile and track record page with the help of Creative services

If you are new to the company, the track record may show off what the company has sold/ leased in recent times

Chaser ads

An advert seeking listings

Business cards

Property Brokers will provide your business cards

DLE cards

You are entitled to your first 500 introductory DLE cards free, and 500 DLE cards celebrating your first sale

Newspaper advertisement

Property Brokers will pay for a free self promotion ad in the paper to get you started.

Coffee cards

Property Brokers can provide coffee cards to hand out to clients

The Road to Success in Commercial Real Estate

Getting new listings No stock on the shelves = No customers •

Be professional and patient. Address each matter accurately

•

Go for a drive weekly around every commercially zoned street or your farmed area.

Look for buildings where tenants look like they are either moving out or have grown too big/too small for their premises. Make a note of any vacant buildings or other companies listings

•

Save latest listings from propertybrokers.co.nz, realestate.co.nz, primecommercial. co.nz, primebusiness.co.nz, nzbizbuysell.co.nz and trademe.co.nz websites to your inbox

•

Ask for referrals at the end of every successful deal

•

If you answer the vendor’s questions the right way, you will get the business. Never start talking about ‘you’. Your answer must be about them and what the benefits are to them

•

Use Discovery questions – Who, What, Where, When, Why and How E.g. “May I help you” = “How may I help you?”

•

Common complaint – “We don’t have enough saleable listings” Get the price right. Give it to another agent to try, remove it, or turn it into a Tender or Auction

•

“Another Agent said they would list it higher “ Inform the Vendor that their mission is to select the best salesperson, not the best price. A salesperson has no control over the market, only the marketing plan.

Never select a salesperson based on price

•

“I still think my property is worth $XXX,XXX.” I have researched and shown you all the recent comparable sales. Where did you get that information from?

•

Check the expired and withdrawn listings

•

Advertise your success. Clients want to be associated with a successful salesperson

Success is a numbers game – the more you do the more you get

Property Brokers Limited MREINZ Licensed under the REAA 2008

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Appraisals Preparing an appraisal Appraisals should never be handwritten, keep it easy to read and professional (Template is in Property Suite) •

Write address on the office white board

•

View the property with colleagues

•

Identify potential issues eg. boundary, zoning, leaky building etc.

Current Market Appraisal (CMA) to include: • Complete details of 3 recent sales in the area (if not available) put this in writing •

Complete details of 3 comparable sales (if not available) put this in writing

•

Find stats from all or any of the following:

- RPNZ

- www.trademe.co.nz

- www.realestate.co.nz

- www.primecommercial.co.nz

- www.primebusiness.co.nz

- REINZ

- Valuers

Include copies of any of the following from the pre-listing flyers on the Intranet: •

Pricing to sell

•

What price can I expect to get for my property?

•

How long will my property take to sell?

•

How much can I expect to pay in fees?

•

Why do people choose Property Brokers?

•

Property Brokers sell more real estate...

•

Your sole agency with Property Brokers

•

NZ Realtors Network coverage map

•

Commercial brokers map of New Zealand

Present your appraisal in person, if possible, and go over the appraisal with your client

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•

Try and secure listing at the appraisal – take listing pack with you (ensure all owners sign)

•

After signing, go through their marketing and advertising plan, complete the Showcase Marketing form, ask your Vendor to sign and date it. Get a cheque or advise that they can pay by internet banking.

The Road to Success in Commercial Real Estate

If your vendor requires time to decide • • •

After 2 days After 7 days After 14 days

- - -

Diary follow up phone call or visit Follow up phone call or letter Follow up phone call or letter

If ‘NO’ to a listing • • • •

Personal thank you letter from salesperson 3 months later - Follow up phone call or letter 6-12 months later - Follow up phone call or letter The above entirely depends on each vendor

If your vendor lists with another company • • • • •

Ask for the expiry date of their agency agreement if a sole agency Send congratulations letter and leave door open to list Track progress and diary to phone or call in two months to track sale progress Give Vendor sales statistics if appropriate to let them know what either you or Property Brokers are selling/leasing Phone their sole agent and ask for a shared deal if you have a buyer

Submissions • Submissions can be used when you are up against other real estate companies to win the listing • These provide a more formal and comprehensive presentation that can be done in hard copy or emailed • A template is available on the intranet and will be prepared by your administrator once you have provided all the information and photographs • Apply the 80/20 rule - 80% about them and their property, 20% about you and Property Brokers Please note: If the property requires a more professional submission, Creative Services can work with you to produce further options What stops you from getting a listing?

You Price These are the two main reasons!

Property Brokers Limited MREINZ Licensed under the REAA 2008

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Pricing There are 3 prices you should have in your mind at all times 1) The Heart or Emotional price 2) The Real or Probable price 3) The Fire Sale/Mortgagee Sale/Desperation price Always give a price range to your vendors based on the appraisal of similar properties. Be factual and honest.

Don’t let price be a major issue. Say, “It’s not my job to get you a specific price, my job is to do two things. First, find a buyer, and find the buyer at the highest price out there — then the decision is up to you.”

If you have to list at a higher price, warn the vendor at the outset you will only try this for 2 or 3 weeks. If there is no action you must drop the price to the real or probable price.

A successful relationship between Vendor and Salesperson will always be based on TRUST. Gain their trust and they will agree to the market price.

Businesses and Hotel/Motel listings Listing a business requires comprehensive information. Usually a flier does not allow for this and you will need to prepare an Information Memorandum.

• Ask for as much information as you can - The buyers will ask if you don’t • Information Memorandum - Template is on Intranet • Chattels - Ask for list, note excluded chattels • Lease - Ask for a copy • Building description/valuation - Ask if there is a valuation available (if relevant) • Accommodation - How many units, type, rate • GST Returns and Financial Statements - Ask for 3 – 5 years • On License Certificate - Do they have one?

• Certificate of Registration - Do they have one?

• Health Registration of Premises - Do they have one?

• Staff - Full or part time, how many, contracts?

• Check list - Give the vendor a copy • Stock value estimates - Ask for details • History of the business - Ask for details • Reasons for selling - Ask for details • Staffing details - Ask for details • Service contracts - Do they have any?

A standard Information Memorandum is available on the Intranet, however, if this does not meet the requirements of your client, please contact Creative Services to discuss your requirements.

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The Road to Success in Commercial Real Estate

Telephone technique The only thing you have working for you is your voice •

Answer promptly – on or before 3rd ring

•

Use your name and the company name

•

Repeat the details so that they retain them and remember you

•

Use their name and get it right

•

Make the caller feel important

•

Be ready with pen and paper

•

Smile when you are talking

•

Set firm times for future contact

•

Always hang up last

•

Don’t worry about rejection. The reasons a person won’t do business is usually because of timing or you just don’t have the product Clients crave attention – give it to them

Cold call phoning •

Allow the phone to ring a maximum of 6 times

(try to avoid leaving message on answer phone)

• Ask for their help – do you happen to know anyone who is thinking of buying/selling...

•

Stimulate their thinking

•

Buyers may also be sellers, tenants may be buyers – ask the question

•

Be constant – set a minimum number to call each day

•

There is a person in their street that now, sooner or later will buy/sell/lease

– you need to find out who

•

Follow up – follow up – follow up!

Remember you’re a salesperson looking for work!

Property Brokers Limited MREINZ Licensed under the REAA 2008

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Door knocking •

Stand back from the door or them and take a half turn

•

Wait for the vendor to say something before addressing them

•

Always be enthusiastic

•

If a Tenant, find out when their lease is due to expire and diary it

•

Use your body language

•

Never talk too long

• Not interested? Ask if anyone else in their area is looking to buy, sell or relocate • Always give something - pen, calendar, coffee card, flyers, DLE and business card •

Try to make a further appointment

•

Diary the response and make another time to call if appropriate

•

Put them on your database if appropriate

• Take note if tenants are having a sale when no-one else is, do they need cash?

Never ask for anything. Ask for help or give something

Converting vacant buildings to sale buildings •

Know how long the property has been on the market

•

Work out what the cost is per month to sit vacant (rent, rates and insurance lost)

•

Ensure the Vendor knows the financial cost so far, the future monthly cost, at what point the vendor cannot continue, the concessions he will have to make for a new tenant (rent holiday, fit out), deterioration of building, public perception as to why it hasn’t leased

•

Enter into this conversation having a clearly defined goal and the costs involved.

Know when to walk away or leave them in terms of what options would be available to them if they should and what is in their best interest Follow up cold calls with a letter

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The Road to Success in Commercial Real Estate

Securing a listing Prepare blue appraisal folder to present to vendor • Appraisal •

Listing forms

•

Copy of title

•

Copy of any comparable flyers

•

RPNZ print out of vendors property

•

In-House complaints process form

•

Copy of salesperson CV

•

Business card

•

Commercial map

•

NZ Realtors map

Prepare manilla PB Folder for administrator •

Signed listing forms

•

Commercial flyer/internet text –filled in

•

Print out of council and regional rates

• Photos • Key and alarm code • Copy of building and site plans (if available)

Salesperson • • • • •

Ask admin to order DLE cards (if required) Order ABC photoboard signs (if required) Put sign up on property Write thanks you letter to owner Write new listing on office white board

Top listers are top sellers

Property Brokers Limited MREINZ Licensed under the REAA 2008

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During the agency •

Arrange viewing for other salespeople

•

Phone vendor and write reports regularly with feedback through Property Suite

•

Every 2 - 4 weeks have a strategy meeting to assess campaign, take statistics, ask for a price reduction, if necessary. If warranted, ask for more advertising investment by planning the next campaign period

•

Track advertising spending (Property Suite) weekly and give a copy to vendors

•

Offers to ‘Refresh’ listing on realestate.co.nz Bad news is better than no news. Always give honest feedback

Tenanted Properties •

Ask the Tenant how and when they prefer visits. Bear in mind they are trying to run a business

•

Ask the tenant if they would like to buy the building if it is for sale

•

With a short lease, ask if they are willing to extend the lease. This would make the building more saleable

•

Check on the Chattels. Do any belong to the tenant?

Silent or quiet listings • •

Sales Manager must authorise first If not done – no listing fee will be paid to agent Under promise and over deliver — always!

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The Road to Success in Commercial Real Estate

Advertising and marketing Brand Always protect the brand. Any queries, please check with Creative Services

Photography A digital camera/high quality smart phone is an essential tool for a real estate salesperson.

Attractive images help entice buyers. Photographs are powerful bait. Good ones can lure buyers whereas poor ones can do the opposite.

Photography tips •

Have your camera settings checked by the professionals

•

Discuss professional photography with your client

• Check the Property Brokers Intranet for the latest camera or smart phone deals Exterior shots •

Keep the sun behind you, sky should be blue and contain some clouds. Avoid stark shadows, puddles, telephone poles, overhead wires

Interior shots • •

Turn on the lights and use a flash but know your flash’s range.

Photograph on a bright, but overcast day.

Location • Is the property on or near water, does it have a view, is the location unique?

•

Architectural style – is the building modern, high rise, Art Deco?

•

Try night shots, get creative, highlight positive areas

•

Wide angle zoom lens recommended for very tall and extra-wide buildings

•

Shoot at the highest resolution (pixels) then crop the picture on the computer

•

Vary the level of your viewpoint

•

Move slightly left, right or back a few steps before taking the photo

•

Commercial real estate relies on feature shots, walkways, passageways, parking areas, store entrances and public facilities - be creative!

If you are not happy with your photos – go back and redo them every time Property Brokers Limited MREINZ Licensed under the REAA 2008

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Marketing •

• • • • • • • • •

Distribute your business cards everywhere you can. Ask business owners to display them on their reception desk. Exchange them with your solicitor/bank/accountant/ finance/insurance agents and have theirs on our reception desk Be highly visible around town – hand deliver DLE’s and/or flyers Send out newsletters, or a personal website link Wear your name tag Letter of introduction to future client base ‘Open home’ owner user buildings, vacant buildings or ones with accommodation Brainstorm with Creative Services and bounce ideas around to design and create your personal profile Organise free coffee cards as giveaways with a Cafe owner Giveaways – pens, calenders, pads, mouse pads, etc.

Ask your administrator for your 50 (or less) free DLE cards for every sole agency listed or sold

Advertising • • • • • • • • •

• • • •

Expect Vendor funding for every listing. Know how much to ask for, what that will give them and why they should pay for it.

Advertise and support schools or organisations by way of newsletters Avoid exaggeration – remember the Fair Trading Act and REAA is alive and well Don’t use worn out phrases or words. The first phrase should refer to the heading Include a price indicator – omission of price signals ‘overpriced’ and price is what the reader wants to know – but does not want to ask Keep the copy interesting, well written and credible Highlight the benefits rather than the features Advertise to someone – visualise their needs, wants and desires Get the headline right – you only have a few seconds to grab their attention.

Spend two thirds of your time on this. Include location, price indicator and one benefit. 87% of ad impact is in the heading Refresh listings on the internet – photos and words Ensure your photos are the best you can do. Use people in photos to sell the opportunity Publicise your sales and leases with an ad in the paper and DLE cards Monitor response and if it works – repeat it The only similarity between a well written ad and a poorly written one is they both cost the same amount to publish

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The Road to Success in Commercial Real Estate

Information Memorandums Information Memorandums are widely used when a flyer cannot provide enough information or the property is high value.

There are four samples on the intranet:

- Property For Sale

- Business for Sale

- Hotels/Motels

- Leasing

Your administrator will prepare these for you, however, it is your responsibility to provide all the information and photographs They can be bound in hard copy or emailed.

Please note: If the property requires a more professional Information Memorandum, Creative Services can work with you to produce further options.

Signage •

Every listing should have a sign up in a prominent position, if possible

•

Use a larger sign rather than a smaller sign where possible

•

Use a banner on appropriate listings instead or as well as corflute signage

•

Try for sole signage when signing up a listing on a general agency

•

When you see other companies signs go up, get on the phone to secure the listing

•

Always secure corner and main road listings first for effective signage The one who has the most signs wins – Perception becomes reality

Property Brokers Limited MREINZ Licensed under the REAA 2008

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Buyers and sellers Finding sellers •

Send out newsletters/DLE Cards – hand write a note on them (please call me)

•

Build relationships – knowing what people are doing, and what they are thinking, can convert easily into real estate leads if you know what to look out for

•

Door knock – especially on the neighbours of already listed properties

•

Ask for referrals – do you happen to know anyone who is thinking of buying, selling or leasing?

•

Contact private sellers from the internet or newspaper

•

Make contact with the new owners of buildings just purchased – they may need a tenant or to resell in the future

•

Phone ‘Withdrawns’ and see if they wish to re-list

•

Check who bought in the last boom. They may have lost their tenant and now need to sell

Finding buyers •

Walk in or phone in – treat these as a bonus only

•

Internet – they perceive you as a successful agent to contact (Why?)

•

Send your best listings out to other agents in PB with a hand written note as to why they should read it

•

Many top achievers can rely on up to 80% of their new real estate enquiry coming from repeat business and referrals

•

Talk to the people in the know – hairdresser, coffee shop, lawyer, bank accountant, service station, supermarket – anywhere you go. Get your people to give you referrals and get them to develop the habit of asking for real estate leads for you

•

Contact all recent buyers on a 3/6/12/18 month period and put them on your database. Ask if they want to sell or buy a second investment

•

When it’s quiet, go and have a coffee with a valuer/lawyer/accountant – they know what their clients are up to

Commercial Real Estate competitors • • • • • •

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Know what the competition has listed and what level of activity there has been Know what the competition has sold or leased – how did they get the lead?

What area does the competition ignore or overlook?

Phone the Vendor and ask if it is a sole agency. If it is, get an expiry date Phone the salesperson if it is a sole agency and ask if they will do a shared deal Get to know the other commercial salespeople. They are potentially your buyers or sellers and you may do shared deals with them

The Road to Success in Commercial Real Estate

Managing buyers Define who your A, B, C and D list clients are: A

B

C

D

= buy/sell regularly (Those who are ready, willing and able to buy today) These are your No. 1 priority. They have some education, are mentally prepared to make a decision NOW and not necessarily cashed up. = will buy/sell/lease this year (cashed up, has enough equity or deposit) They may have sold, or arranged their funds and are able to buy, but are not yet ready to make a decision as they do not believe they have seen enough to be sure of values = might buy/sell/lease this year (conditional buyers) These might have a property to sell, finance to arrange or another condition to fulfil. = The Bargain Hunter Every salesperson has a list of these people and often that’s where they should be – on a list. Usually looking for impossible yields, a good do-up, subdividable or generally properties with a twist. Can become an A very quickly in a recession.

Have a beginning of the year face-to-face meeting with each of the A clients. Find out what their plans are with their portfolio for the next 12 months and how you and the company can help. Identify their needs and which properties don’t fit their portfolio and should be sold.

Use spare time educating the B client and get them up to the standard of a good A client as soon as you can, then ‘live with them’.

Don’t spend huge amounts of time with the C or D clients until they progress up to B clients.

Building a business relationship with people means knowing and understanding them faster

Property Brokers Limited MREINZ Licensed under the REAA 2008

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Qualifying purchasers •

Why qualify – It will save you time, money and emotional stress

•

Needs – what are their time frames, what are their specifications? e.g. location, size, parking, stud height, amenities

•

Time – by when do they want or need to move in or buy?

•

Motivation – what is their dominant buying motive This is the No. 1 impulse that motivates a person to buy – they buy emotionally and then justify logically

•

Experience – is this their first purchase?

If so, make sure they understand everything

•

Show me the money – have they got the funds?

Can they afford it, have they been to their bank or accountant, are they preapproved, what else do they own (do a search on them using Google, COYS and RPNZ). Do they have the necessary deposit?

•

Authority – do they have signing authority?

If not, who does (check Certificate of Title)

•

Make a business decision about how much time to invest in them – are you going to educate them or find them a property?

Showing properties Confidence in limiting number shown depends on your knowledge of:

1.

The market

2.

Your listings

3.

Your knowledge of the customer

•

Pick three very different types out and ask for feedback

•

Don’t tell them how many you are going to view

•

Approach from the best end of the street, save a surprise

•

Listen and watch for buying signs or statements

•

Present the next few options that meet their requirements

•

Review their motivation and needs

•

Give feedback to all the Vendors

•

Fill out a viewing report if the listing is with another salesperson The reality is customers will always want more than they can afford

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The Road to Success in Commercial Real Estate

Objections Let them ventilate – objections are inevitable Prepare for objections by anticipating the downside to each property and plan a response. Objections are simply a request for more information.

•

Stop. Think. Don’t rush in

•

First time an objection is raised, ignore it unless asked for a response

•

Second time an objection is raised, rephrase the objection as a question

•

Listen to the whole picture, watch body language and draw out ‘Silent Sams’

•

Ask the client for a solution, involve them in the decision making

•

Be confident, credible and creative

•

If the objection is true – admit it

•

If the objection relates to something that was true – explain and clarify it

•

If the objection relates to something untrue – deny it, give the true picture

•

If the objection relates to time, distance or money – dilute it

•

Not all objections can be overcome immediately Maintain control of objections by being prepared for negatives Unless a buyer objects, challenges or fights you, they normally won’t buy

Buyer/Tenant “This is a great office, but I’m concerned about the number of car parks” Salesperson “Why is the parking space such a problem for you?”

Keep exploring till you know the real objection or until you can help solve it Lead them - not push them.

Let them believe they came up with the solution

Property Brokers Limited MREINZ Licensed under the REAA 2008

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The selling process Typically in selling property you negotiate the following: 1.

The price 2.

The deposit 3.

The settlement date 4. Conditions

The Vendor It is imperative that the exact name of the vendor is displayed upon the Sale and Purchase agreement. If a Company, the exact name together with the suffix ‘Ltd’ must be displayed.

If a Trust, the entity will not be Ltd., however, the suffix ‘Trust’ will appear at the end of the name together with the names of the Trustees.

The Purchaser The purchasing entity maybe a person, trust or a company. It is wise to add the words ‘and/ or nominee’ after the name of the Purchaser. The Purchaser would be entitled to change entity even if those words do not appear; by making this statement the matter is clearly addressed.

Capacity It is important that both the Vendor and Purchaser have the ability to sign for the entity they purport to represent. If there is greater than one director or trustee required to make signature, it is wise to have the one party sign ‘as duly authorised representative for the XYZ Trust’.

Legal description Legal description should be written in full. Check against Title.

Price and deposit Use numbers and then the price written in words underneath the numbers. Note the deposit should represent sufficient consideration for the Vendor to be certain that the Purchaser will complete the agreement.

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The Road to Success in Commercial Real Estate

Settlement Possession and settlement date is the same date unless you add a special clause.

Balance of purchase price – choose option 1 or 2 on front page of sale and purchase agreement.

Tenancy details Basic tenancy details can be written into the base of the agreement. These should be sufficient as to be legally binding. If the tenancy schedule is particularly long, one can write, ‘as per attached schedule’, and then attach the schedule to the agreement.

Clauses Copy and paste the relevant clauses off the Intranet, if not available through REINZ website, or Property Suite

Sales and Purchase Agreements The front page has Yes/No option for LIM (9.2) and building reports (9.3). You can, however, write a clause to suit instead and in this instance, don’t circle these options.

Property Brokers Limited MREINZ Licensed under the REAA 2008

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Presenting an offer Pre-condition where you can •

Get the best offer possible

•

Get it in writing

•

Ensure all parties have signed

•

Don’t express confidence in acceptance

•

Get someone else to phone for the appointment with the Vendors. That way they cannot badger you for the price over the phone.

•

Make sure all parties required to sign will be there

•

Arrive at meeting 5 minutes early and clear your head, practice the various options that might occur

•

Get control and watch the seating

•

Be confident and warm

•

Get agreement on small points

•

Give them the agreement – and SHUT UP

•

Then close the deal or negotiate until agreement is reached

IF NO •

Personalise buyers (don’t overdo it)

•

Explain risk of counter offer

•

Try and get more than ‘half’ in counter offers

•

Be persistent An agreement is not binding until both parties are advised

Positive language Use softer words to reduce the stress and fear from buyers and sellers e.g. Commission....................... to................ Fee for service Price................................... to................ Total investment Deposit............................... to................ Initial investment

Vendor contribution......... to................ Marketing investment

Objection........................... to................ Area of concern Sign.................................... to................ Authorise, Agree, Ok or Approve Appointment..................... to................ A time to stop by or call in

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The Road to Success in Commercial Real Estate

Negotiating The purpose of negotiating is to reach an agreement so all parties have their needs satisfied.

There are six negotiating styles: Win-lose A wins

B loses

Lose-win A loses

b wins

Lose-lose Neither party gets anything they want Compromise Some wants of each party are fulfilled, others are not No deal Both parties agree to disagree Win-win

The parties work together to discover a third alternative that satisfies the needs of both The focus is to achieve a win-win

Ensure you have agreement Ensure you have agreement from the client before you go anywhere near the negotiation.

Consider the following: •

Everything is negotiable - it’s a game so get in there and play!

•

Use of power - you have the power to help people get what they want

•

The impact of emotions - desire, greed, fear or anger

•

The element of time in decisions - urgency, rushing, deadlines, delay

•

Developing options - do your homework, know your alternatives

•

Know what you want - think through your desired outcome

•

Preparation is the key - subject matter, objectives, issues, positions

•

Clarifying your positions - essentials, limits, maximums, minimums

•

Reversing the situation - see the situation through the others eyes

•

Questioning Assumptions - question, gather data, interview

•

Successful elements in negotiating - location, personality, positioning, timing

•

Persuasion by reciprocation – giving and receiving

•

Persuasion by social proof – use facts, numbers, names, statistics

•

Price-Negotiating tactics – question and assertion, add on

•

Walk away method of negotiating – selling (set the bottom price) buying, ask what is their bottom price, be prepared to walk away

•

Negotiations are never final – go back and ask for changes

Property Brokers Limited MREINZ Licensed under the REAA 2008

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The four essentials of negotiating In closing, remember the four essentials of negotiating, upon which all successful negotiations are based.

29

•

Get the facts, prepare in advance and aim high

•

Ask for what you want and know exactly what you want

•

Seek win-win solutions

•

Practice, practice, practice!

The Road to Success in Commercial Real Estate

The close There are four responses to a close:

1 No

2

3 Maybe

4 Yes

No • • • •

Poor qualifying techniques A breakdown in communication Lack of suitable stock Re-qualify and reassess their needs

I don’t know/I want to think about it

I don’t know/I want to think about it • Ask open ended questions Maybe • The most common objection Yes •

Act immediately and prepare paperwork

Under offer - conditional •

Draw up two originals and one copy, leave the copy with the purchaser as their working copy, negotiate with the other two originals

•

Clauses. Business, Hotel or Motel clauses can be copied and pasted off the Intranet (standard clauses are also on the Intranet and the REINZ website)

•

Check the Certificate of Title for signing authority

•

Ensure all changes are initialled by all parties each change

•

Two original contracts are to be signed and dated (back and front) after the last initial or signature

•

Give two originals to administration for distribution to both lawyers, plus a copy for the file. The purchaser and vendor are to receive a copy.

•

Give a copy to your purchaser’s bank (if there is a finance clause and one is required)

•

Enter unconditional date and address in administrators diary

•

Note special conditions with dates to be completed by in your diary

•

Write on whiteboard that the property is under contract or leased

•

Track each condition and ensure they are fulfilled by due date, help purchaser if necessary

Property Brokers Limited MREINZ Licensed under the REAA 2008

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Day due to go unconditional Administrator •

Request unconditional confirmation from purchaser’s lawyer by fax

If not sold Salesperson •

Ask Purchaser to request extension if required by their lawyer

•

Write the new date in your diary and your administrator’s diary

•

If extended – give copy of lawyers confirmation to your administrator

•

If sale is off – call and see Vendor and explain situation

•

Talk to purchaser to decide what they want to do next

•

Change white board, advise salespeople

If sold - unconditional Salesperson • Change white board to sold, put a sold sticker on window card and sign • Phone Vendor and Purchaser, offer congratulations and ask for deposit.

Administrator • Send fax to both lawyers to advise date deposit paid Salesperson • Order 50 (or less) DLE Just Sold cards if Sole Agency for distribution •

Fill out Real Estate Settlement Advice and Transaction Report (from Intranet)

Attach :

- Listing form and any extensions to agency

- First and last page of contract

- Copy of lawyer’s fax confirming unconditional

- Any relevant paperwork that affects your commission

•

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- All into envelope, write address of property and which office on front (to go to Finance)

Give property file to administrator with a note attached saying sold or leased

The Road to Success in Commercial Real Estate

Settlement Chattels check • •

Ask purchaser if they wish to do an inspection (day or two before).

If they don’t, ask for that in writing or note in your diary

Insurance •

Remind the purchaser to insure their building

Rent •

If purchasing an investment property, the purchaser needs to give the tenant/s a new Automatic Payment form

Administrator • •

Fax lawyer for key release (if required) Keys only released after fax confirmation from lawyer saying settlement has taken place

Salesperson •

•

Phone Vendor to arrange keys to be dropped off at our office or their solicitors office, if appropriate Let Purchasers know what time keys will be made available and where

Gifts • •

Key rings are available through Head Office Purchasers and Vendor - up to salesperson

For sale/lease sign •

Ask Purchaser/Tenant if they mind sign being up for a while – diary to remove

Database •

Enter Vendor/Purchaser in your database and diary follow-ups

Property Brokers Limited MREINZ Licensed under the REAA 2008

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Maintaining the business • Be accountable, critique your performance and constantly strive towards improvement • Keep finger on pulse regarding conditional sales • Look at strategies with every listing every week • Follow up vendors, buyers and tenants regularly • Go and view all new office listings • Plan and prepare the week in advance • Return all calls everyday • Talk to new people every day • Read newspapers to keep an eye on editorials and other companies listings • Track your Internet hits - if nil response change the header, ad or photos • Send out newsletters • Add new contacts to your database • Brainstorm ideas with your colleagues/partner/friends/family • Community events - get involved, join investments group, be seen • Build your profile and track record - talk to Creative Services • Bigger deals take time, hence maintaining a mix of deals is cash flow critical

Referrals Salesperson • Referral pads are available and to be filled in • Phone calls and walk ins are not a referral • Send top copy to the referred salesperson, leave bottom copy in pad

Goals There are 4 types of goals – Personal, Business, Short Term and Long Term • Life goals are essential. Understand clearly your plan and what your goals are

concerning career, family, wealth and retirement • Write them down and be clear what you want • Have a plan to work towards the result • Remind yourself about them every day • Have a time frame to achieve them by • Track – what method do you use and is it working?

• What are the consequences for not completing them • Use SMART goals - Specific, Measurable, Achievable, Realistic

and Time bound If you fail to plan, you plan to fail 33

The Road to Success in Commercial Real Estate

Plan for the future Year 1 •

Start to build relationships and how to profile and qualify your customers

•

Get up as many signs as you can

•

Build your personal systems, database and profile

•

Training and education

•

Develop a business plan

•

Aim for four to six sole agencies at any given time

•

Farm a patch if working in a large area

Year 2 •

Continue to build relationships – concentrate on ‘A’ clients with weekly meetings

•

List and sell more Tenders and Auctions

• Start bi-monthly discussion groups •

Take time to set higher targets and goals – what you track you improve

•

Clear plans for growth in your business plan

• Continually update your skite sheet (sold and leased)

Year 3 •

Reassess your business plan and goals

•

Look at options to build by delegation and employment (PA)

•

Take on Development projects with clients

•

Look for properties suitable to sell and syndicate

•

Growth, structure and drive, belief and stability

Year 4 onwards •

Careful planning – Time management, Success, Balance, Consistency of Income, business plan

•

Continued growth and success Most people spend more time planning their holidays than their Life!

Property Brokers Limited MREINZ Licensed under the REAA 2008

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This is Property Brokers’ Country!

Proud, parochial and provincial.

Property Brokers now have 32 branches and 400 salespeople and employees throughout New Zealand.

We are members of the New Zealand Realtors Network, which reaches from Northland in the north and Invercargill in the south, with everywhere in between covered by one of its 20 member companies and 155+ branches.

Property Brokers Branches

Property Brokers have branches in these great locations.

NORTH ISLAND Palmerston North Ashhurst Woodville Feilding Foxton Marton Taihape Wanganui Dannevirke Pahiatua Hastings Havelock North Napier Taradale Clive

Waipukurau Masterton Carterton Greytown Martinborough SOUTH ISLAND Ashburton Amberley Geraldine Greymouth Hokitika Oamaru Rangiora Timaru Waimate