Many new commercial real estate brokers learn things the hard way. It’s unfortunate. I’ve been there. Starting something new is hard. You don’t know what you don’t know.
I was a new commercial real estate broker once, and I’ve seen plenty of new commercial real estate brokers come into the industry. Truth is a lot of new commercial real estate brokers make a lot of the same mistakes.
Today I am going to break down the top 10 mistakes I see new commercial real estate brokers make and give you some ideas on how to avoid making them.
Here is a quick preview, but keep reading for all the juicy details!
- Not leaving the office
- Not being in the office
- Not cold calling enough
- Cold calling without a purpose
- Not asking enough questions
- Failing to keep good notes
- Not picking a specialization
- Not seeing beyond the competition
- Comparing
- Bullshitting
1. Not leaving the office
The first mistake I see new brokers make is not leaving the office. You can sit in front of a computer for hours looking at LoopNet, or contemplating comps on CoStar but that will never give you a true sense of your market. Too many new brokers use their screen as a shield. They feel they need to be present in the office, doing research, analyzing, and being seen.
You have to get up, get in your car and drive your market. You have to leave the office.
To really learn your market as a new broker you have to get out and be IN the market. Drive thru that industrial park, walk around that shopping center. Pay attention to who the tenants are, what is vacant, how is the condition of the property. Take notes (see mistake #6). Who has what listed? What new developments are going up? Where are potential opportunities?
Listen, when I first started as a new broker, I felt awkward leaving the office randomly in the middle of the day. I thought all the other brokers who were in the office must have thought I was cutting out early or slacking off. Judging me for not being there. I didn’t have any appointments to say I was headed to or listings to pitch. I was just going to aimlessly get in my car and drive around.
Well, I pushed passed those negative thoughts and I am glad I did. I got such a better handle on the market. Hell, I knew more about what was happening than the 20-year complacent veteran brokers because I was outside the office, seeing things first-hand.
I am not asking you to cold call (yet) just spend the time outside of the office familiarizing yourself with the properties in your market, go everywhere, see everything!
2. Not being in the office
You may think I am contradicting myself when I say the second mistake I see new brokers make is NOT being in the office but hear me out. It’s a balance. Don’t go to the extreme of spending so much time outside the office driving around that you miss out on some of the benefits of actually being in the office.
Equally, when you’re in the office, be present. Don’t bury your head behind your screen. Pay attention to what the other brokers are doing and saying. Eavesdrop.
Hear them use a term you don’t know? Look it up, ask questions. Ask to sit in on a listing presentation. What are they saying when they are cold calling (hopefully they are cold calling). Be a sponge and take all in.
3. Not cold calling enough
Speaking of cold calling… another HUGE mistake I see new brokers make is not cold calling enough or *gasp* not at all! It may not be the most fun part of the business, but cold calling is absolutely necessary. If you want to be successful as a commercial real estate broker you gotta cold call.
Do it first thing in the morning. Eat the frog. Get the worm. All those things. Set a small goal, say 5 or 10 calls every morning. Commit to it. Chances are you do 5, you get in a grove, and you’ll be up for more. Then do it again in the afternoon. The important thing is that you do it.
Also, just know this, when you get hung up on or someone is rude to you, they aren’t rejecting you. The rejection may feel real but do your best not to take it personally.
4. Cold calling without a purpose
When I was a new broker cold calling seemed excruciatingly terrible. I didn’t know what to say, how to say it or what I should even be calling about. With no listings, or experience. what did I have to offer? It was award, like really awkward.
Many new brokers feel this way. The way to avoid this is having a reason or purpose for your call.
If you feel like you have nothing to offer when you are cold calling you need to create it. Create a reason.
It’s easy. Just ask yourself “how can I add value to this person?” It could be anything. Take for example:
Hi, my name is Tiffany, I am a commercial real estate broker, and I am calling because the property down the street recently sold and was curious if you wanted more information on that sale?
Of course they do, and the information doesn’t even have to be from your listing or sale- you can simply get the data from CoStar or the assessor’s office). The point is to give them information that could be relevant and helpful to them. This adds value, opens the conversation and makes a cold calling easier.
Other examples of information that can make a cold call warmer and have some purpose include: new developments in a prospect’s area, announcements of new tenants coming to the market, vacancy rates, recent sales, etc. You get the idea.
Always have a reason or a purpose for your call.
5. Not asking enough questions
Remember when I mentioned that you need to be a sponge in the office? I want you to take that to the next level by not just listening but by asking a ton of questions. Many new brokers don’t ask enough questions and that is a mistake.
When you are in an office with experienced brokers take advantage of asking questions and learning as much as you can from them. I think new brokers often hesitate in asking questions because they feel like they may be judged or that they are being a nuisance or interruption. Forget that, ask anyway.
Get curious and don’t be afraid of sounding dumb.
In fact, you can phrase your question to help combat this. Instead of asking the top producing broker in your office what NNN are? Ask them how they typically explain to a tenant what NNN are? Not only will you get the answer you’re looking for, but you’ll get some interesting insight as to how that top producer got to where they are and what they do. Also, don’t hesitate to ask the same questions to different brokers. Sometimes hearing the same thing in a slightly different way is what will make it click for you.
The more questions you ask, the more knowledge you get, the more confident you will be.
6. Failing to keep good notes
Okay, so you’ve spent time driving the market and have made hundreds of cold calls, now what? Well, commercial real estate is a long game and the information you get today may not be helpful for you until next year or even five years from now.
Don’t make the mistake of failing to keep good notes from the start. Build a database of every tenant and property owner you talk to right now. Take notes of expiration dates, set reminders. Set yourself up for success in the future.
I cold called a hair salon in the first months of starting as a new broker and they told me they just signed a 3 year lease. I could have walked away a bit defeated and been done and moved on. However, I put a reminder in my calendar to call them back in 2 ½ years, and guess what?
I called them 2 ½ years later, reminded them that we talked, and helped them move into a larger location! Long game win! Yet, it wouldn’t have been if I didn’t take good notes and follow up.
Information is power in this business. Do everything you can to get as much of it, organize it and use it.
7. Not picking a specialization
This list of the top mistakes that new commercial real estate brokers make is obviously not in any particular order because if it were this one would be at the top of the list. Not picking a focus or specialization is the number one mistake I see new brokers make.
I’ve outlined all the reasons why commercial real estate brokers should specialize here, and in hopes of not sounding like a broken record I won’t go into every detail as to why specializing is so important, you can read up on that on your own time. Just know I’ve seen far too many brokers try to do it all and end up failing, badly.
Don’t try to be a jack of all trades because as the saying goes, you’ll be a master of none. Pick a focus and stick with it (Office, Industrial, Retail, Land, Multifamily- choose one). Generalists didn’t put a man on the moon. They don’t perform brain surgery.
Generalists don’t standout. If you want to be great you need to specialize.
8. Not seeing beyond the competition
Not seeing beyond the competition isn’t just a mistake new brokers make, in fact seasoned brokers probably make this mistake more frequently. Either way, it is important to mention.
The commercial real estate business can be cutthroat and competitive. There really is no denying that. Yet, collaboration and supportive business relationships with other brokers is so important to help you succeed.
Rather than perceiving other commercial real estate brokers as a threat, see what you can learn from how they do business: What are they excelling at? How did they get to where they are today? What are they doing that is working? Learn from them.
Furthermore, collaborate with them. This business needs so much more of that. As much as you may view a broker from another firm as competition, you can view them as your friend. Okay, maybe not all of them. However, the relationships I have built with brokers from other firms have been some of the ones I’ve cherished the most. If you find one you can trust, sharing information, insights and even leads back and forth can be super valuable.
So, don’t be afraid of the competition. Lean in.
9. Comparing
Another big mistake that can hinder your success as a broker is comparing yourself to other brokers, especially those with more time in the business #guilty. It is easy to get sucked into wondering why you aren’t closing multi-million dollar deals when the senior partner down the hall has closed 2 just this week. Don’t do it. Don’t compare your chapter 1 with someone else’s chapter 20.
Comparison is a scrub and will rob you of your success. And as we learned from TLC, we don’t want no scrubs. If anything, use seeing someone else’s success as motivation to keep pushing. Know that their success isn’t taking away from yours.
Keep your head down. Focus on you. Put in the work. Do not compare yourself to other brokers.
10. Bullshitting
The final mistake on my list of mistakes new commercial real estate brokers make is bullshitting. Notice I didn’t say “fluff” or “fudge” I said bullshit. I chose this word to drive home this point.
I’ve seen many new brokers spew loads of bullshit to compensate for their lack of time and experience in the business. It is sad because often clients, tenants, and buyers will blindly believe them even if they are wrong.
Does this space have a grease trap? Sure. (BS)
What’s the load factor here? 12% (BS)
Do I need a personal guarantee? No (BS)
If you don’t know something, admit it. It is far better to say “Let me check on that and get back to you” than guess or say whatever, be wrong and have to backpedal.
Also, there are a lot of commercial brokers who try to impress people by using pretentious jargon and highly technical language. Please don’t be one of them.
Aim to learn the basics, be able to explain concepts as simply as possible (layman’s terms) and don’t bullshit. It will get you so much further than the alternative.
So that wraps up the top mistakes that new commercial real estate brokers make. Use these and learn from the mistakes of others.
Stop stressing, newbie… Just don’t make the above mistakes and you will be a super-stah in no time. Even if you do make these mistakes, no big deal- you will learn from them. Just don’t make the same mistake twice!
