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Communication and Transparency Will ALWAYS Win the Day

Look at Leasing
By: David Liebman, James Hochman

We both agree that one of the most valuable pieces of advice we’ve ever received was: WRITE FOR THE READER.

In other words, always know your audience (read, clients) and armed with that critical knowledge, always communicate directly and effectively with them. In that way, you will always succeed in gaining your clients’ confidence and support, avoid what we call “mutual mystification,” and ensure that you and your clients will achieve the best results in the transactions that you are managing on their behalf. Some examples illustrate these maxims.

Recently, one of us was introduced to a new client from a key influencer. The client was outgrowing its warehouse and needed to acquire a larger facility. The client’s property search criteria were extremely limiting, and other than the warehouse already leased, this client had little experience in commercial real estate transactions. She was warned that the market was extremely tight, and it would be challenging to find a property meeting her criteria. The search took longer than expected, which resulted in the failure to update her during that period of delay. After she received the property survey, she responded that none of the properties included links to virtual tours, information one might typically find in a residential real estate property survey but not always found in commercial property listings. Had she received communication sooner, had expectations been sufficiently set, and had she been advised of the work product she should expect, we could have avoided these hiccups in our professional relationship.

A second example of needed transparency and clear communication: disclosure of broker compensation. All too often we have heard inexperienced brokers lament that they prefer not to advise their clients of how and how much they are being compensated. This is probably the worst mistake that a professional and confident commercial real estate broker can make at the outset of a professional relationship. The client wants a broker to be transparent in all dealings with them, the key component to establishing trust. Do you disclose to your client when the landlord is offering a discounted or bonus commission, or extended commission payment schedule? Without clarity on these issues, a conflict of interest could arise between broker and client, leading to an unsustainable relationship. What’s more, unless the client has full confidence in its broker and knows that the broker always represents the client’s best interest, the client is unlikely to support the broker in efforts to collect well-earned commissions, should a reluctant landlord try to avoid payment responsibility. In our view, full disclosure of broker compensation only serves to instill confidence in the broker’s professionalism and builds a solid client relationship going forward. It is entirely appropriate to explain the basis of your compensation, giving you the opportunity to explain the many tasks you perform, the value of your experience and actions, and why the system “works.”

Communication and transparency cannot be undersold or overdone. Try it, we guarantee your clients will like it!

 

Media Contact
Alexis Fermanis SIOR Director of Communications
David Liebman
David Liebman
Merit Partners, LLC
dliebman@meritre.com

David Liebman, SIOR, JD, is a managing broker at Merit Partners, LLC. Contact him at dliebman@meritre.com.

James Hochman
James Hochman
Schain Banks Kenny & Schwartz
jhochman@schainbanks.com

Jim Hochman is a partner at Schain Banks Kenny & Schwartz law firm and freelance writer. Contact him at jhochman@scheinbanks.com.