A lot work goes into finding, pursuing and nurturing a prospect to the point where you have the opportunity to try and secure their business. This is done through a formal representation agreement.
Having earned that opportunity, there are many things to consider when crafting a representation agreement that works for both your client and you: exclusivity, terms, fees, cancellation rights and dual representation, as well as conflicts of interest.
If you’ve done all the appropriate prep work and used Apto effectively, delivering an agreement that checks all the right boxes becomes much easier.
Here are some key areas where Apto can position you for a successful assignment.
Broker fees are one of the biggest points of contention, and while this is highly unlikely to change, the ability to negotiate fees and control the narrative is firmly in your hands.
The idea is to present yourself as a trusted advisor, not a service provider. The latter is a cost, the former is an investment. If your client views you as an advisor, then convincing them that your fees are justified should be a little easier.
The best way to justify your asking price is past success. The best way to demonstrate your past success lies in Apto.
Here’s why: Apto is your system of record. It should contain your contact, company and property database. Your contact engagement history, closed deals, comps and existing pursuits. All of these relate to each other to give you a complete, connected picture of your past, present and future business.
When you track not only your deals but also the rest of the market’s deals, you are building an incredibly powerful tool that enables you to communicate and demonstrate how you’ve added value. Use Apto Views and Reports to generate lists of comps that show how your average CAP rate, lease rates and time to close outpace your competition.
Once you’ve shown that your fees are justified, you need to negotiate and clearly state how those fees will be split. Apto enables you to start tracking commissions for both internal agents and external agents from the very outset of a deal.
Once you add the commission amounts in Apto’s Proposal Record, they carry through the entire deal pipeline, allowing you to define splits by dollar amount or percentage at every stage of the deal. This not only lets you document and track this information, it also lets you forecast your earnings and plan your year.
Do you like to get paid for the work you do? If you answered yes, then pay close attention.
In the event that your deal expires and you’ve not secured a tenant or buyer—but your client succeeds in doing so shortly after and that buyer or tenant is someone you engaged—you are entitled to your fee. Michael Bull, CEO of Bull Realty and host of America's Commercial Real Estate Show, describes this in one of his many Answers videos.
You do this through a prospect registration clause in the representation agreement; one that includes specific types of engagement activities that you can prove to your client. You prove who your registered prospects are by taking impeccable notes inside Apto. Here’s how:
PRO TIP: Track the context of your engagement activities to ensure you can show what your phone calls, showings and offers were regarding.
Being disciplined in tracking every engagement can be the difference between earning a commission and not. Make sure you put in the effort and circle the wagons of your deal so that you don’t have to worry about getting paid.
Not every deal is the most marketable, and even when they are, deals don’t always close. You have a set time to do what you said you would do. That time period is negotiated and should be clearly stated in the rep agreement. Seems simple, right?
Where many brokers go wrong is in the documentation of the negotiated term. This in turn leads to confusion, which is something you can’t afford when dealing with transactions the magnitude of commercial property. In fact, anything that has the potential to introduce emotional discourse should be well documented and referenceable at a moment’s notice.
To ensure you know when your deal went “live,” track early. Start with the date of the first meeting, then follow through by tracking every major milestone thereafter leading to the date that your deal goes to market. Doing so sets the precedent early and helps ensure you continue the trend throughout the life of the deal.