Numbers released today for the Housing stats in Orlando. Starting to look up for the Housing Market. The 3 yr indicator is that we are almost at the same inventory we were back in 2006-2007 when things were going crazy. Although we may not see the rise in home prices in the 200% plus annual increase range, I think that this new number released shows how good the Orlando market can be.
The positive uptick in contracts pending is a good sign that prices have leveled and the market is starting to stabilize. The bad news is that buyers and sellers really have no idea of the problems that are out there that Realtors face daily. From Contract to Close, most agents tell me that we are still looking at 3-6 months if a bank is involved by means of short sale or foreclosed property.
For Commercial Real Estate, this is actually good news. It helps us understand were the market shift is going. Well, if history is an indicator, we are going to see a downward shift in the CRE market. Commercial tends to follow closely to the residential market. This means, next month and for the next 18 months, commercial deals are going to get low and slow.
How should we help this problem? As a commercial agent myself, I am going to educate my clients. If they know the process, they will see the value in your services. That is what we are all about anyway, right? We must add value to our clients and their needs. If we can't do that, then we are just another sales associate, trying to make a dollar.
One more call is what I will do. I will make that last call of the day, and with enough skill, luck and persistence, I will continue to have a great year as a Commercial Real Estate Agent.
Who's with me?
Wednesday, June 10, 2009
Thursday, June 4, 2009
Lease Negotiations-Trust your Advisor
First Call me! Then second be prepared to answer some basic questions on the terms:
- Is this a renewal?
- What is the current commercial market demanding for your space?
- How much time do you have?
- Are you expanding or contracting or flat on your growth?
- Are you using the most efficient space configuration as possible?
- When do you need to decide to stay or look for other space?
- Are you ready to spend numerous hours negotiating with the landlord?
- Have you ever negotiated a lease with counsel and sophisticated Commercial Landlords, and Brokers?
If you cannot answer one or more of these questions, don't go in this alone. Hire the help of a qualified Commercial Real Estate broker, that has experience in Lease negotiations.
When negotiating a lease, there are many factors involved in the decision. First, how long and for how much are you willing to commit to the lease. The longer terms are better for more negotiating power in the beginning, but can tie you to a location for the next five, ten, even twenty years. Are you ready for that commitment?
Second, consider the alternatives. Do you know if your landlord wants or needs to keep you in the space? Do you know what similar space in the area is being leased for? Are there other factors over the next several years that may affect your location?
Third, be ready to discuss in great detail the lease document with the counsel or the landlord broker. Remember, these folks work for the Landlord, not you. Be careful how much information you give out as it can and will be used in negotiations later.
Understanding the negotiation of the Lease is complex. If you have never done this before, I strongly suggest calling a qualified Broker. Our expertise and daily negotiations with landlords and other brokers, help use develop a relationship with the landlords and brokers so we can get the lease to execution faster.
Do you understand the financial analytics of the lease deal? The financials of the document can get very confusing. Triple net leases, Double Net, Modified gross, Full Service, etc., if you don't know these types of leases, the landlord representative will be able to "smell" that you don't understand what you are doing, and they WILL capitalize on that lack of knowledge. In the end you will not come out ahead.
Negotiating a successfull, mutually beneficial lease transaction is a complicated and lengthy process. Please remember never fly a plane without a pilot, and don't go into a commercial transaction without an advocate on your side.
Well, I joined the heard of followers of Twitter! This is an interesting take on our narcissistic society. Who cares if Aston, Shaq and Demi are eating dinner, watching TV or doing things us regular folks wish we could be doing. Are they just rubbing their stardom in our face? Seriously, I find it amazing that we spend so much time, really doing nothing.
I am done with my morning rant, I will have some CRE news for you in a bit.......but if you are concerned about my morning activities, i am going to get a hair cut with Kim. And yes she will be washing my hair afterwards!!!
I am done with my morning rant, I will have some CRE news for you in a bit.......but if you are concerned about my morning activities, i am going to get a hair cut with Kim. And yes she will be washing my hair afterwards!!!
Wednesday, June 3, 2009
Commercial Update: Florida
Commercial RE is exciting right? Well only if you are making money at it. I hear it all the time, brokers giving away their services for "Free"! What profession can you get "professional" business advise, consulting, or services for Free? Well, in Real Estate, both Residential and Commercial, it is common practice.
Do you know the average hourly rate for a Lawyer is $200-$300 per hour? And half of the time, if not more than half of the time, you are not getting the lawyer's individual expertise, you are getting a "paralegals" expertise and the lawyer just is finalizing the documents, advice, etc. Know for all you lawyers, do not get mad yet. We need you, we know that. And you have worked long and hard to earn that degree on your wall. But the reality is we have worked long and hard to build up a book of business, our degree happens to be more in "Hard Knocks" or "street business" than the prestigious law degree.
Why do we as professional Real Estate practitioners give away our services? I think it is because many of the inexperienced agents and brokers are afraid to ask for retainers, up front costs, or hourly rates. I am successful, and I always get a retainer or some sort of equity position within a deal. Even if it is just enough to cover my advertising costs for the deal.
Point is that we are professionals, and for us to be compensated only by commissions is insane. That is why so many of us are struggling right now. That is why so many of us wonder why client A chose another agent and cut us out of the deal. This happens because the customer has no real reason to stay loyal to us, even with an exclusive agreement, because the customer knows that they have an easy out, just provide you with notice and you are fired.
We need to take control of our customers. Explain to them the benefits of our profession. And begin demanding that we are treated as advocates, not as commission hungry "SALES GUYS (and GALS)"
So I say, from here on, start demanding more skin in the game from your customers, and if they won't agree to it, then find another customer that will. You will be more profitable and more respectable in the long run.
Do you know the average hourly rate for a Lawyer is $200-$300 per hour? And half of the time, if not more than half of the time, you are not getting the lawyer's individual expertise, you are getting a "paralegals" expertise and the lawyer just is finalizing the documents, advice, etc. Know for all you lawyers, do not get mad yet. We need you, we know that. And you have worked long and hard to earn that degree on your wall. But the reality is we have worked long and hard to build up a book of business, our degree happens to be more in "Hard Knocks" or "street business" than the prestigious law degree.
Why do we as professional Real Estate practitioners give away our services? I think it is because many of the inexperienced agents and brokers are afraid to ask for retainers, up front costs, or hourly rates. I am successful, and I always get a retainer or some sort of equity position within a deal. Even if it is just enough to cover my advertising costs for the deal.
Point is that we are professionals, and for us to be compensated only by commissions is insane. That is why so many of us are struggling right now. That is why so many of us wonder why client A chose another agent and cut us out of the deal. This happens because the customer has no real reason to stay loyal to us, even with an exclusive agreement, because the customer knows that they have an easy out, just provide you with notice and you are fired.
We need to take control of our customers. Explain to them the benefits of our profession. And begin demanding that we are treated as advocates, not as commission hungry "SALES GUYS (and GALS)"
So I say, from here on, start demanding more skin in the game from your customers, and if they won't agree to it, then find another customer that will. You will be more profitable and more respectable in the long run.
Tuesday, June 2, 2009
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