Choosing an agent to sell or lease your property is an important decision to ensure you achieve the results you’re looking for. But sometimes it can be difficult to tell one from the next.
All too often, the lines between the “sales” and “marketing” components of an agency agreement are blurred. Owners who appoint an agent might think they are getting a full marketing and sales campaign, while the agent appointed might think he or she is just providing a transaction service.
This can lead to projects being underresourced from a marketing perspective and, even worse, create tension between owners and their appointed agent once the campaign is underway.
It’s important to make sure everyone is on the same page before progressing. Here are some important questions to consider asking your agent before you put ink to paper.
Plus it will also help ensure your project’s marketing campaign is designed for success.
1. Who is the target market for this property and how will you reach them?
This seems a simple concept that too often is glazed over very generally. There are likely several target groups that your property might be suitable for. It is critical for any successful marketing campaign to have a deep understanding of the drivers, hot buttons and pain points for each of these target groups that your asset could help solve either as an investment vehicle or a place for someone to do business.
2. How are you planning to position the asset?
Positioning is a marketing term that’s often misunderstood. Unfortunately, leased space and real estate investments are often viewed as commodities – or, in other words, viewed as pretty much the same, leaving price as the only variable. In reality, that isn’t true. Your asset will likely have key attributes that some target markets will find particularly appealing. It’s important that your asset shines as the No. 1 choice for buyers or tenants who value those attributes. If your advisor can clearly demonstrate this, then you’ll likely be able to get a price premium.
Asking this question of prospective brokers will give you some insight into how they plan to present your asset to the market based on its core differentiators rather than as a commodity. A strong marketing campaign can have a big impact on how real estate is perceived.
3. Do I need to invest money in advertising?
Due to economies of scale, commercial real estate companies are often able to negotiate very good rates and preferences on marketing initiatives such as media buying, photography, printing, signage etc. This question will help identify what agency strengths you can leverage to get the best bang for your buck. It will also help you uncover what potential marketing gaps may exist.
Some agencies will include professional photography but might not include the cost of expensive architectural renderings or video walkthrough tours. Some consultants might even try to skimp on photography and send their assistant out with a smartphone.
Prior to signing a listing mandate is the best time to negotiate what marketing elements are included and to determine if perhaps you need to top up your campaign’s advertising spend to ensure your project gets noticed. The important thing is to be clear about what you are getting up front so you can make a fair comparison between agencies.
4. Does your marketing budget include professional photography or renderings?
If you already have these for your property, then that’s great. If not, it is critical to get good photography or professional renderings for your property. Your property will appear alongside many other properties on a buyer’s or tenant’s short list — often presented to key decision-makers who will never set foot on the property itself. Whether it’s making a good first impression or looking a little more appealing than your competitors on a short list, good photography is a must-have. If it is an asset you’d like to sell quietly off-market, then I would argue good imagery is even more important! In that case, you’ll only have a limited number of buyers. It’s important to maintain their attention and interest.
If your selling or leasing agent dodges this question, then consider this a red flag.
5. Can I see examples of other marketing campaigns you have completed for similar properties?
Not only will this give you some good ideas, but you’ll be able to get a feel for the firm’s marketing capabilities. Trust me, you won’t need to be an expert to differentiate the good-quality marketing collateral from the bad. But see if you can identify the marketing strategy behind the samples.
A good marketing track record is a great indicator of the sort of marketing program you’ll get for your campaign. This is where you might find some advisors really stand out from the crowd.
6. Who is on your marketing team?
It’s a good idea to ask about marketing resources assigned to your project. Whether it’s an in-house team or a third-party marketing specialist, it’s good to make sure they have the capabilities and track record to execute commercial real estate campaigns. Look for signs that there is a good working relationship between your broker and the marketing team. It’s important to make sure the marketing collateral is aligned to the personal experience your prospects receive on the phone and on tour.
Even better, ask to meet with the marketing leader. Marketing is an important part of the process, and you should feel comfortable that it is in good hands.
7. What are you doing to promote the property online?
In fact, 59 percent begin their commercial real estate search online. What’s even more astounding was that, when they have an appointed broker, 55 percent of them still self-perform real estate searches online.
Some commercial real estate firms have developed excellent digital marketing platforms to help promote your property online, and some are still lagging behind. Asking this question will help you identify how progressive your agents and their firm are. You should also find out what tools they have to increase the chance that your property will get in front of the majority of buyers and tenants who are online.
8. Can you help get us some PR?
Most commercial real estate firms of note have excellent relationships with local journalists and business news outlets. In fact, most of them have well-oiled PR machines. Many projects present a great PR opportunity to help position the asset or provide the parties involved with important third-party endorsements.
PR and social media are powerful tools to generate chatter about your project and help position your asset in the mindset of the general business community. It might also help you tell your company’s story. People trust what the news media says, and you might be surprised how accessible and cooperative they can be if you help them with a good story.
Remember to ask about PR and get your broker’s firm’s PR machine working for you.
9. What additional marketing components do I need to provide for a successful campaign?
Sales and leasing agents often have a limited marketing budgets. In some cases, these are tied into their own personal commission. This actually incentivizes them not to incur any hard marketing or advertising costs. In many cases, it may be wise to take on some of the marketing cost yourself to ensure you have full control of the marketing and advertising spend, quality and outcome. Whatever the case, if you ask this question, you will be able to identify elements that will help your advisor achieve the results you both want.
Final word …
Remember: A broker is in a tricky situation during these negotiations. He or she is typically very excited at the potential of earning your business and doesn’t want to upset the apple cart too much (so to speak). But it’s important for brokers to have all the tools and support they need to go out and represent your property in the best possible light. Having this conversation will actually help your broker — and ultimately help you get the best financial result possible.