What is the Process of Hiring a Commercial or Residential Real Estate Professional?
In Part II, we primarily featured Commercial Real Estate with some residential items as well, while taking a greater dive into more important real estate terminology, the pros, and cons of hiring a real estate professional, and questions you should ask before hiring a real estate professional. The intent of this last article in the series is to provide you with the decision-making information to better understand and answer the question above.
This post will focus entirely on outlining the hiring process and specifically on how to decide to hire a Real Estate professional.
How to Make the Decision on Hiring a Commercial Real Estate Professional
As noted in Part I, there are two main segments of real estate professionals: Commercial and Residential. Part II went through the pros and cons you should be cognizant of to best frame your questions, and some potential questions you might ask. All of this has led to help you make an informed real estate professional hiring decision.
The first step after you’ve done your research is to RECOGNIZE you need a professional. It may be obvious to you, or it may have taken years with no results to arrive at this decision. You may be a landlord who needs to lease vacant space or sell a property, or a tenant interested in a new location, or a renewal of a current one. The good news is you’ve completed the hardest parts of research and recognition.
The second step is to determine what your requirement is - what do you have questions or need help with? Do you need a retail leasing specialist? A vacant fast-food restaurant or someone skilled in single tenant net leased sales? Office building or Industrial warehouse space? This is a critical decision that will shape your experience. Ideally, the point is to match the tool to the job. Hire an expert who specializes in your product type. If you’re selling your house hire a residential broker. For your retail space hire a retail broker. For office space hire an office broker.
Now that you know what you need, it’s time for the WHO. So, how do I find a good Commercial Broker skilled in the specialty I need? One place to look is for the letters at the end of their name. These are designations earned from a combination of continuing education and historic work experience – these must be earned. Also, potentially look for a team instead of an individual person. A team is one of the most productive ways to leverage your results. Do you need a big international brokerage house like a CBRE? Maybe. The big firms have much broader reach and resources than potential local people and firms– that’s why they’re the big firms. But understand that you are hiring the person – not the firm. It is the person who will be responsible and accountable, not the whole company. So, a good local individual or team may have all the necessary education and tools you need and be a better fit for you and your organization.
INTERVIEW professionals like you interview any other job candidate or service provider. We recommend you do not hire a friend unless they are truly the most qualified people. The risk is the personal relationship being stressed because they both choose poorly. Hire someone you can hold accountable and not feel uncomfortable requiring results. Make sure your agreement allows for, if they don’t perform, the ability to let them go with very few but fair repercussions.
ASK for specifics during the interview. In Part II, we provided a laundry list of questions you should prepare ahead of time and truly think about what matters to you. Ask about the most challenging transaction ever and why. Ask if they have a competitive property, where. Ask about their process and how they would market your property. Have they been successful in the past? How long did it take? Require examples. Ask pointed questions about the length of the listing term.
Finally, it is always important to recognize who gets paid, by whom, and how much. It’s important you understand the value proposition and where dollars are being exchanged and who benefits in those exchanges. As part of that, you will need to understand fees… what do they charge? Oh yes, it is very important to talk about MONEY. It’s so important we might just have to add a whole post to talk about it in the future, so please stay tuned.
HERE’S YOUR CHECKLIST:
RECOGNIZE you need a professional
What SPECIFICALLY do you need a broker to do?
Select INDIVIDUALS or TEAMS to meet
ASK for details
Talk about MONEY
What is the Process & Timing to Hiring a Real Estate Professional
When you have made the decision to hire a real estate agent to assist you in the home buying/selling process it is important that you are ready to purchase or sell a home. As the real estate market and home buying/selling process can move very quickly. In order to not waste your or your agent’s time make sure you are truly ready, and able to put an offer in on a home. Once this is established reach out to the agent of your choice and work towards signing a buyer’s broker/agent agreement. This will create a relationship between you and the broker/agent and explain the broker/agent’s duties to you. After the agreement has been executed, the agent will begin to show you homes and help you submit offers, negotiate, and eventually close on your new home. If you are hiring an agent to sell your home the process would look similar. The agent would help show your home to potential buyers as needed, receive offers, present them to you, negotiate on your behalf, and eventually assist in closing on the sale of your home.
When hiring a broker to help your company when you are selling a building or a portion of a building to lease the process and timing is as follows. Overall, the process would take 2 weeks. First, you should hold a series of initial meetings with the brokers that piqued your interest the most. Next, you should ask each broker to prepare a report or presentation of their opinion of market conditions and their opinion of value for that listing. After this, you should work towards selecting your favorite broker and signing a listing agreement with them. When selecting a broker to assist your company in finding a lease, a building for purchase, or a parcel of land. You should hold interviews, select what broker you liked best, and sign an exclusive representation agreement. This agreement will create a relationship between you and the broker and explain the brokers' duties to you. Next, the broker would take you on a tour of your top properties. Your broker will assist you in placing an offer, signing a purchase agreement, and eventually closing.
What is to come within our Real Estate series?
We hope our series on Hiring a Real Estate Broker or Agent has been enlightening and given you the information required to make the best decision for you or your organization. As always, our goal is to provide you with the decision-making information to help you better understand and answer the questions you might be asking yourself or your team. While there is certainly no singular answer we can provide, hopefully, we’ve added some clarity to the situation and potentially some processes that will help you arrive at your best decision for your unique situation. We hope this most recent article will help you through the hiring process and specifically on the decision to hire the right real estate broker for you.
If you enjoyed this series, please stay tuned for future posts reviewing Real Estate Professionals as we continue through future articles on the myriad of topics surrounding real estate, including one about MONEY!