This is the first in an 11-part series of understanding the key ingredients in all successful real estate transactions.
How about a little brain exercise or walk down memory lane? How many business clichés can you mention in two minutes? To get you started, here are a few: “thinking outside the box;” “pushing the envelope;” or perhaps “seamless integration.”
One I happen to like is “core competency,” not so much for the cliché as for how important and necessary it is in life. Real estate transactions involve huge sums of money and in many situations the purchasing of real estate is the single biggest investment many people make in their lifetime. Anyone interested in learning more about core competency?
In our publication, Key Issues in All Real Estate Transactions, we have “Selecting a Qualified Real Estate Professional” as the first and foremost decision in the process of creating a successful real estate transaction. Here is the list of qualifications to look for in a broker.
Experience. There certainly is a difference is having 30 years’ experience versus doing the same thing over and over for 30 years. Real estate has so many unique and complex issues that having an experienced professional working for you is vital. Effective brokers will be familiar with tax-deferred exchanges, lease versus buy analysis, estimating your closing costs prior to entering into a transaction, and correct pricing of your asset in listing it for sale or lease.
Professionalism. What professional organizations and designations does your potential candidate have membership in? Your professional should be able to mention several professional organizations they belong to requiring more than just paying an annual fee. Additionally, does the person also demonstrate the character, courtesy, and the appearance of a professional? Is this a person who you want speaking on your behalf during the negotiating process?
Market Knowledge. This is a large subject and should not be taken lightly. How well connected is your professional? For example, they should know the players, owners, and movers and shakers (for yet another cliché). A major responsibility of a real estate broker is to know where an available property is and to know how to find who wants it and bring the parties together.
The second main responsibility is to know if the parties are capable of meeting their obligations to close the transaction. Much of the time this involves knowing the financial condition of the buyer or tenant and if they have the wherewithal to close on a transaction.
Negotiation Skills. One of the best negotiating strategies is to ask questions. The professional negotiator does not provide information but rather seeks it. Learning the other party’s goals, time constraints, and whether they have the authority to make the necessary decisions are the basic skills of negotiation. Your real estate professional needs these abilities in abundance.
Sales Skills. People only buy for two reasons: to solve a problem; or for good feelings. The professional knows this and asks questions to discover the motivation of the consumer. The expert salesperson uses questions as their many source of closing a transaction. Your expert working for you needs to do the same.