In my 34 years of practicing commercial real estate, there have been countless discussions about how to select a commercial real estate broker. Many property owners, tenants and buyers fly blind while selecting someone to represent them. Property owners, tenants and buyers desire to work with someone they like, but often relationship elements drive the selection. Working with someone who listens, communicates well, and is user-friendly is an easy path to take. While these are great traits when selecting a friend, likeability may not be the best approach when choosing a steward to handle what may be your largest asset.
I am fortunate to have been productive and successful beyond my wildest expectations. But it didn’t happen overnight. Looking back, there was enormous luck involved in learning this business and effectively representing clients. Unless a young agent is closely supervised, the potential for costly mistakes, some of which occasionally lead to litigation, is great and should be avoided when possible. Enthusiastic people are fun to work with, and certainly the youngest among us have a lot of energy. I must confess that while I love this business, my obvious enthusiasm for every project with which I’m involved is less obvious than when I was a young pup. That said, the following set of questions may be helpful to you when selecting a Broker or agent to represent you.
You may also have ideas of your own about the selection process that are overlooked in this essay, and if you have something to add or wish to discuss, please email your feedback and ideas to make this tool better.
Questions for Brokers and Agents
- How long have you been selling and leasing commercial real estate?
- On what do you specialize?
- How many transactions have you completed in your career? Can you provide a list for the past 3 years with a map showing their locations?
- What is the character of your brokerage company?
Marketing this Property
- What are the characteristics of the likely buyers/lessees for this property?
- How long do the brokers think it will take to sell or lease?
- How many properties in this approximate size range have sold in the past 12 and 24 months in this sub-market?
- What is the price range and price per SF for those properties?
- Who were the buyers of those properties, and for what use were they purchased?
- How closely do the prices match properties competitive with yours?
- Has the Broker created a matrix comparing your properties to the others adding and subtracting for differences in quality, size and attributes?
The Agent and Their Marketing
- If your initial plan does not work, what is your back up plan?
- Can you give me ten references from property owners for whom you have sold/leased properties in the past few years?
- Can you share the names of five buyers/lessees you have represented, and the addresses, size and characteristics of those properties?
- Can you share the challenges you have overcome completing these transactions and how you accomplished them in each case?
- What Escrow Company and agent do you normally use? Do you mind if I call them for a reference? (Professional service providers know who is good and who is not. Listen to their feedback.)
The ability and willingness to answer these questions should separate the players from the pretenders. The decisions you make selecting professionals with whom to work are essential to your long term success. These decisions impact you significantly and the choice of an ineffective practitioner can result in lost income that is gone forever. Selection of the right Broker can be a decision that pays you dividends for decades, not to mention, makes your life easier and more predictable.