Learn Effective Lease Negotiations
As a real estate professional, you must already know the significance of dealing in lease negotiations on behalf of your client. They rely on you to make the deal as favorable for them as possible. If you represent sellers, they would like to have their real estate handed to people who give it value and pay good price, but if you represent buyers, they expect you to bring the price down as much as possible once they have picked the property they want. When it comes to negotiating a lease, you have to remember the singular key guideline: since the lease is drawn by the landlord, it will be filled with clauses that protect their interests.
Achieving the goal of turning the contract around to favor your client will require expertise and outstanding negotiation skills, which makes it immensely significant for real estate sales and letting brokers.
Commercial Lease Negotiations: What You Should Do
Over time, the industry has evolved and some best practices have emerged to protect all parties concerned. However, much is still in the hands of the brokers representing the buyer and the seller. Since the terms of the contract are still to be determined by the buyer and seller (or their representatives) within the allowed parameters of the state and federal real estate law, the skill of good negotiations is drawn into the spotlight.
With a commercial lease, this skill becomes all the more important for many reasons. Your client is starting a business or moving into a new workspace and they want to cut down on the expenses as much as possible. Therefore, as their representative, you will be expected to come prepared to the meeting, ready with expert lease negotiation skills to save your client as much money as possible.
Lease contracts come with a lot of conditions, some standard and others included by property owners to get the most out of the deal for themselves. As the buyer’s representative, you are expected to know exactly what those pointers and clauses could be and go after them from the start.
Property Lease Negotiation Done Right
Interestingly, with a property lease negotiation you are leading as the broker, you will have to negotiate on both ends. While you may naturally feel inclined to make your client as happy with the deal as possible, you may need to give them seemingly unsavory advice with your expert professional opinion about certain aspects of the deal. Consider this scenario: You are negotiating a new contract and you are getting a great deal on the price but your client wants you to negotiate an even lower price. Now, if you go ahead and push for an unrealistically low price for the asset, you know the seller will walk away from the deal. What will you do then?
In such cases where it is obvious the deal will fall apart due to their client’s unrealistic expectations, an expert real estate broker will request another session to finish the negotiations, and turn the negotiating around to their client in private to discuss in detail why they are making a mistake with their insistence for the price they want. In doing so, the representative will actually be protecting the client’s interests, while trying to get them a great property on a reasonable price.
On the other hand, what do you do if the seller is demanding an outrageous price for the property and your client is not letting you negotiate the price further because they like the property a lot? Will you let your professional reputation be jeopardized with the prospect of the client coming back to you later and say you should have negotiated the price further? They could write bad reviews about you and your practice, for instance.
This is why an expert real estate professional who have plenty of experience with commercial lease negotiation always prepare their clients to walk away from a deal. They also ensure they have the negotiation power during these meetings and understand their clients’ expectations in their preparation for negotiations. These are the key behaviors that set expert lease negotiators apart from amateurs.
Our Products to Help You with Lease Negotiations Education
As an organization that focuses on professional education and training, Lorman Educational Services is always looking for ways to provide professionals with relevant means of further training to expand their skill sets. When it comes to commercial lease negotiations, we have a range of digital training products that might interest you regardless of what type of real estate services you provide as long as commercial deals are part of your work.