4State Backgrounding Everything You've Learned About Real Estate

5Sep/11Off

Commercial Real Estate – The Key Things I Have Learnt About Pitching For A Listing

real estateWhen you sell or lease commercial property as an agent you want more quality listings in the right location. You also want a realistic property owner or landlord that understands the true market conditions and will accept reality on prices and rents. So how can you fix and satisfy these matters?

Some of those listings that you find in the property market today will sell or lease as the case may be, and some will not; on that basis you need a steady source of new opportunities to pitch for the listings in your area. Prospecting for new business will always improve that opportunity number, so let's assume that you have prospecting under control and then just look at the presentation or pitch process.

The best listing presentation is one that involves you only, and no other agent is pitching at the same time. In that case the client is not influenced by discounts and bargains offered to woo them to the other agent. In this market only about 25% of presentations will be on a single agent basis. So this says that you have to be prepared to win the clients business through a great presentation that is tuned to the needs of the client and the property.

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4Sep/11Off

Systems to Follow in Marketing and Selling Commercial Property

real estateWhen you take a commercial or retail property to market it pays to use a marketing system and sales pitch that creates real enquiry and gives solid feedback to the client.

Even if your real estate service and approach is not that different than other agents in the same location, it is up to you to make it seem better and more relevant to the client. Again it comes down to systems to explain and support the marketing process, your presentation, and the sales pitch.

Your clients understand that they have a choice in the agent to market their property. You should give them the real reason to pick your agency over the others that are available or pitching for the same work. How do you do this? Make the clients property special in both its offering and its features.

A simple system to follow in pitching your marketing process differently for commercial real estate can be best summarised as:

  1. Clarify the target market that best suits the property.
  2. Set real reasons for the method of sale and the timing of sale.
  3. Show the client how your database already features a good base of property enquiry in that target market.

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3Sep/11Off

Commercial Real Estate Appraisal Cost Approach

real estateThe cost approach was historically prepared as a part of most commercial real estate appraisals. However, the compunction to include the cost approach (when it was not relevant) has dissipated over the last 20 years.

The principle of substitution is the technical basis for employing the cost approach. According to the principal of substitution, a prudent buyer would not pay more than the cost to build a like property. In other words one would not spend $2,000,000 to purchase a new apartment complex if they could build it for 1,500,000.

The cost approach value is the sum of the market value of the land, depreciated replacement cost and entrepreneurial effort. Land is typically Valued using the sales comparison approach. The replacement cost is the cost to build a building of the same quality and functional utility as the subject property. (Reproduction cost is the cost to build an exact duplicate. This approach is used occasionally for old buildings built using materials and or types of craftsmanship not currently used.)

External obsolescence occurs when circumstances outside the subject property's boundaries negatively impact its value. For example, an office building in New York would suffer from external obsolescence if Manhattan office occupancy fell from 93% to 75%. A mansion built next to a slaughter-house is another example of external obsolescence.

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