Saturday, July 14, 2012

How to do a Great Proposal in Commercial Real Estate Today

business man giving thumbs up signal
Top agents need top proposals

Many potential clients or prospects will ask you for a proposal to sell or lease their property and then compare the document that you submit to all other proposals that they get from other agents.

Here are some tips from our bulletin for Commercial Real Estate Agents.

Regrettably, a lot of commercial agents and salespeople jump at the proposal request and spend far too much time on the creation of the document.  Invariably the proposal then turns out to be something like the following:

  • A large document talking about the strengths and abilities of the commercial real estate agency
  • A complex document with far too many words that are unlikely to be read
  • Something that lacks strategy and timely solutions given the pressures that are applying to the client and their property
  • A complete mismatch to the requirements of the client
  • Little market commentary that can give the client key solutions to move ahead in a competitive market

If a client wants a proposal, ask them why that is the case (as you can answer all of their questions right now); if you still choose to proceed in the proposal then ask them to tell you of the most important things they would like addressed in it.  Tell them that a proposal is a very specific document that has to match the client and the property; before you start the process you would like to fully understand the client’s priorities and pressures.
In other words a request for a proposal to sell or lease a property is not a moment in time to get excited about; keep your control on the request and ask questions before you say ‘yes’.  Far too many agents jump at the request to do a proposal only to find that they were never in the ‘running’ and that another agent was on the scene ready to go.  Your proposal was used as a reason for the client to choose the other agent!

Here are a few things that typically happen with the commercial real estate proposal documentation that you create today.

  1. The client will use the proposal document to justify the choice they have already made.
  2. The client will go to the price strategy, marketing strategy, and commission as part of the assessment process.
  3. You will be given a short time with the client to go through the proposal and talk about the solutions you can provide.

The big problem here is that the client is in control.  They are in control from the moment they ask you for a proposal.  Your eagerness to comply with their requests can be your greatest weakness.  Invariably the client will use your proposal as a base of negotiation across a number of different agencies to achieve a discounted commission and a low cost solution in selling or leasing the property.

Do you really need to work with clients that come from a base of discounting and cost savings?  Do you really need to help them with a competitive proposal that they will compare to every other agency in the local area?  Shouldn't you really work with clients that respect the strategy you provide and the initiatives that you can move the property through as part of the marketing process?

Some ‘top agents’ will not do proposals; they win the business from a base of experience and relationships.  Most ‘top agents’ will not do a proposal because they know what the client is going to do with it (use it as a comparison tool).

So here are some strategies that are worth considering if you choose to submit a proposal to the client as part of a competitive process.

  1. Do not discount your fees or commissions in any way.  It sends the wrong signal to the client and shows them that you are prepared to comply with their requests simply get a listing.
  2. Your proposal should be short and to the point.  As a general rule, the document should be no more than ten pages in length.  At least 90 per cent of the document should talk to the property marketing strategy and the client’s needs.  It should be a document with a timeline of strategies that are easily identifiable for the client.
  3. Put a time limit on your proposal so the client has to make a decision in a timely way.  Seven days is sufficient time for the client to make a decision.  Give the client some solid marketing solutions to move ahead.
  4. Tell the client that your strategies and solutions are part of your office marketing strategy for the coming week.  When the proposal expires you will move on to other properties that are coming into your office and agency.  
  5. Tell them of a short list of prospects that you have already identified in your database and who will be approached as soon as the property is listed.
  6. Give them a legally binding listing appointment and ask them to sign it at the time of your proposal.
  7. Use graphics and images in your proposal so the client’s interest is maintained in reviewing it.

Proposals for listing a commercial property are largely won and lost on just a few things; they are the knowledge and confidence of the individual, and the strategy or solution provided.  The proposal is only a small part of the equation.  Build relationships at every opportunity; that will win you more business than anything else.

You can get more free tips for commercial real estate agents at our website right here.