As a commercial real estate broker, you probably consider yourself to be professional, fair, open, and honest. Are you also transparent? Completely? Follow these questions and comments and decide for yourself just how transparent you are and whether your clients view you the same way.
- Can you describe the basic principles behind Sarbanes-Oxley?
- Do you tell clients and prospects that you will be transparent in your dealings with them and on their behalf?
- Are you really transparent in your dealings, or is that just marketing hype?
- Do you keep your tenants and buyers informed about your dealings on their behalf and about the compensation to which you may be entitled when they complete their transaction?
- Do you only mention compensation to your tenant clients when a landlord offers you a discount, an unacceptable rate, or payment schedule that takes too long or puts you at risk?
- Do you also inform your clients when landlords offer you compensation bonuses or incentives?
- Do you disclose relationships to your clients that THEY may see as being in conflict with your ability to properly serve their interests, even if you don’t see the same conflicts?
- Are you really completely transparent?
- Are your company’s relationships so vast and geographically dispersed that it is often difficult to understand the many possible conflicts-of-interest that may exist, let alone identify and report them to your clients?
- Are you transparent with your transactional opponents and competitors? Should you be?
Being transparent is not a buzz word, it’s an absolute, a must in business. You cannot be transparent on some issues, and not on others, and then claim to be transparent. That’s being partially transparent, which means you’re not really transparent. Either you’re transparent or you’re not!
Being transparent in your dealings is not that tough. What are you afraid of? Do you think your clients will figure out that maybe you’re not as good as you said you were? Are you afraid that if you are transparent about your compensation that your clients may want some of it? If you are truly concerned about this, then perhaps you should ask yourself if you really are worth what you expect to receive in compensation…if you deliver sufficient value to your clients, so that they will recognize your worth and entitlement to fair compensation.
Are you afraid to disclose that a landlord offered you a compensation bonus? Why? Do you deserve it? Will accepting it have a negative impact on your client? Would your client think so? Would your client be concerned that you didn’t disclose it? If, for some silly reason, you chose not to disclose an offer of a bonus, what a tremendous opportunity you missed to build a stronger relationship with your client
If you don’t create a lot of value for your clients, if you’re merely an old-fashioned real estate space jockey, doing little more than driving your clients around the market, dropping them on a landlord’s doorstep and expecting to pick-up a check when the landlord completes your client’s deal, then you SHOULD be nervous! While you’re still providing a service and are entitled to be paid, you’re probably not entitled to the same compensation as a true professional real estate broker or advisor who helps his/her clients plan and negotiate complex transactions and provides superior service to them. Like in any other business, if you’re in it for a quick hit and provide minimal service and value, you should expect to be compensated in a similar fashion, and frankly, in a lesser amount than your competitors who really deliver!
Wouldn’t it be great if your clients backed you up when it came time for you to be paid? Yours won’t? Why not? Could it be that you haven’t been transparent, that they don’t trust you or don’t believe that you are worth the amount of compensation you seek? Your relationship with your clients, and how your compensation is treated, can’t be one way. If you choose not to accept discounts, then don’t accept bonuses. State your compensation requirements to your clients at the outset of your engagement. Inform them that you don’t accept bonuses, and neither will you accept discounts. When a landlord or seller offers you a bonus, tell them you must inform your client (that tells the opposition you can’t be bought), then tell your client! $10 bucks says that, so long as you provide your clients with stellar service, every once in a while, your clients will let you keep those bonuses. If not, then by your transparent disclosure, it will be the best investment in your relationship with that client that you could ever make! You’ll also likely find that your clients will support you when a transactional opponent attempts to under-pay you or tries to put your compensation at an unfair risk.
If a rogue landlord attempts to force you to accept a compensation amount or structure that is less than you would ordinarily accept, advise the your client, and let the landlord know you intend to do just that.. Many tenants won’t feel comfortable with a landlord who attempts to under-pay their real estate advisor, as they often see that as a sign that the landlord will be unfair to them, and will likely under-fund or under-deliver for them, too. Ask your client to support your efforts to secure fair compensation. If your client recognizes the value you’ve created for it, they’ll back you up almost every time!
Heck! Even if you don’t get to keep a landlord offered bonus, think of all the incredible goodwill you’ll create with your client, your ability to deflate the opposition’s intent on swaying your negotiating strength by “buying you off”, how much stronger you’ll be in negotiating on your client’s behalf, the additional concessions you’ll likely secure on your client’s behalf, the strengthening of your reputation, and the future credibility and additional business opportunities you’ll likely get from the client who knows he can trust you…even with cash!
About Real Estate Strategies Corporation
Real Estate Strategies Corporation is a respected corporate advisory and transaction services firm that provides thought-leadership, decision-making, planning, project management, and transaction execution services to financial and senior executives at management team-led public, private, and portfolio companies, and not-for-profit organizations. Under the leadership of its award-winning CEO, Andrew B. Zezas, RealStrat’s clients engage the firm when acquiring, disposing, renegotiating, or enhancing occupied leased or owned real estate in New Jersey, Pennsylvania, New York, Connecticut, and throughout North America. By creating and executing Business DRIVEN Real Estate Solutions and identifying hidden Opportunities, RealStrat drives greater operational and financial performance in support of its clients’ stakeholder objectives, M&A requirements, and exit strategies.
In the current economic environment, RealStrat’s efforts are focused on uncovering, capturing, and re-purposing hidden liquidity and minimizing risk in its clients’ leased and owned real estate. The firm provides counsel as to competitive advantage strategies in preparation for the eventual economic recovery. Visit www.RealStrat.com. Read about timely commercial real estate issues at RealStrat’s blog at www.CorporateAdvisor.wordpress.com. Follow RealStrat at http://www.Twitter.com/RealStrat.
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