Having been in the Real Estate Business for over 40 years, I have heard many questions regarding the fees we charge for our services. These fees are referred to as commissions or professional fees. One question I heard recently from a Southwest Florida potential client was; “I’m a little confused here. I’m paying you 3 years in advance at 6% and exactly what services do you offer during the lease period” My response was candid and was not to be meant or taken as rude in any way. Fortunately the potential client understood and appreciated my response.
My response was as follows:
If my job is done correctly there is nothing for me to do during the lease period. I will outline the reasoning for my statement.
- Our job begins with evaluating your objectives and desired outcomes.
- We work with you to determine your desired financial outcome.
- We evaluate your property and price it competitively for the marketplace as well as aligning pricing with your needs and desires.
- We “Target Market” tenants and uses that would enhance and bring value to the neighboring tenants and uses.
- We investigate if the potential tenant needs approval of any outside agency or association.
- We investigate the allowable uses under the property’s current zoning.
Marketing and Promotion of Property:
- We list the property through the Multiple Listing Service and various Commercial Websites to expose the property to the Commercial arena.
- We prepare flyers for distribution to area Brokers and associates of the Sunstar Company.
- We identify possible tenants that we are presently working with to match location, price, size and usage needed in the marketplace.
- We position a sign or appropriate advertising on the property, in compliance with the local government or association codes and restrictions.
- We coordinate advertising and inform the local Brokerage community of the availability and pricing of your property.
- We educate the Brokerage community of any special conditions or restrictions regarding the property.
- We encourage fellow professionals to assist in locating a possible tenant for the property.
- We inform fellow real estate professionals of the cooperative commission policy of our firm.
- Additionally we inform the brokerage community of any incentives or bonus commissions that might be offered to them for assisting in the leasing of the property.
- We field inquiries on the property from advertising and drive-by traffic and attempt to pre-qualify the prospective tenant.
- We arrange showings of the property to the inquiries and attend follow-up showings of the property, often may times.
Management of the Leasing Process:
- We author a Letter of Intent (LOI) when a prospective tenant wishes to make an offer to lease the property.
- We negotiate on your behalf with the prospective tenant keeping your best interest in mind throughout the negotiation.
- We provide the executed LOI to your attorney or designee to prepare the lease agreement.
- We are not allowed to draft a lease documents according the Laws of the State of Florida.
- We review the lease documents the make sure the terms are consistent with the agreed terms of the LOI.
- We present the lease agreement to the tenant and respond to questions or concerns of the tenant.
- We handle the execution of the lease documents and return them for your signature.
- We distribute the fully executed documents to the parties of the agreement.
- Once the lease agreement is signed it becomes a valid and enforceable legal contract between you and the tenant.
Post Leasing Activities:
- We generally publish a press release to announce the tenant to the community and notify the Broker community of the lease.
- We collect our fee after the lease is signed and you enter an enforceable contractual relationship with the tenant. This contract can be enforced in a court of law.
- We do not charge additional fees upon renewal of the lease in this case. The renewal terms are part of the original lease.
My Port Charlotte, Florida client responded to my e-mail and asked me to meet her and pick up the keys to the building. I believe that the Real Estate industry needs to police itself and provide professional representation for the fees we charge our clients.