4 Closing Techniques Every Broker Should Know
Closing a commercial real estate deal is rarely a smooth endeavor. Even the most seasoned CRE brokers still experience eleventh-hour curveballs, despite their years of experience and skill. And in many ways, a simple and easy closing is a unicorn — hard to catch, extremely rare, and likely just a legend.
But then again, if you didn’t love a good challenge, you wouldn’t have become a CRE broker.
While some aspects are out of your hands, there is plenty you can do to close more deals. And by understanding, incorporating, and honing these techniques, you can guide your clients to the closing table with confidence and maneuver obstacles with ease. Not to mention, it will help you meet even the loftiest revenue goals.
While overcoming objections and knowing your competition is part of dealmaking 101, there are a few more nuanced skills and techniques you may not always consider. To help you level up, here are four essential closing techniques every CRE broker should master.
1. Form a plan
This may sound rudimentary, but it’s surprising how many professionals confuse having a plan with having a goal. A plan requires a step-by-step, detailed vision of what you want to accomplish and the path you’ll take to get there.
Start by looking at one active deal. Where are you today? What are some steps you can take to guide the deal on to the next phase? Now consider the big picture, and map out each stage until you reach the closing table.
Of course, no two deals are the same, so each transaction requires its own unique plan.
For example, suppose your client wants to purchase or develop upper-level apartments or condos with mixed-use development such as first-floor retail. In that case, it will require a different set of steps than someone who wants a warehouse facility for light manufacturing with office space. The first transaction is much more complicated than the second, and both will require different strategic decisions to reach the end goal.
A solid plan will also help guide contract negotiations and the lease or purchase agreement. If your client’s plan includes zoning and easement requirements, for example, you will need to spell that out in the agreement. Your plan should leave no stone unturned.
2. Identify potential roadblocks (and react appropriately)
Here’s another winning CRE technique that’s less of a trick and more of a skill — but still essential to your success.
One of the biggest barriers to getting your client to the closing table is the failure to identify, understand, and resolve roadblocks without disrupting your plan. In most cases, failing to see hurdles is a rookie mistake — something you do early in your career and learn to overcome with time and experience. But, even veteran brokers can be caught off guard.
That’s why it’s crucial you anticipate issues and hone your sixth sense for sniffing out potential sticking points. For example, you might stumble into problems with title insurance or real property law. Or, unwelcome findings might arise during the due diligence period, third parties might have interests contrary to your client’s, or there might be challenges with the lender. Understand these issues and their impact on the transaction. Then, work to find a solution by bringing the parties together and strive to accommodate everyone’s needs — but always put your client first.
How you handle roadblocks is what determines your win rate — and earns you lifelong clients. In many cases, you can overcome certain obstacles with a bit of creativity and the help of other parties — like knowledgeable title writers, legal professionals, and underwriters. As you gain experience through your encounters with such issues, you’ll start to identify warning signs before they become a problem. In the meantime, keep your cool and learn from every new experience.
3. Recognize and overcome third-party barriers
Bureaucratic red tape is no joke. While deadlines and closing dates are critical to transaction participants, third parties that are unrelated to the deal (but vital to moving it forward) can be a source of frustration. Apathy among those who don’t have an interest in the transaction, such as government agencies or vendors, can throw a wrench into the whole process. These professionals are also often extremely busy and have no reason to prioritize your needs above everything else on their plate.
But while you might begin feeling like a bureaucrat wrangler, it’s in your best interest to always anticipate third-party apathy or sluggishness and head it off before it becomes an issue. In this case, the squeaky wheel often gets the grease. Be tactful, but apply pressure when you feel the third party is an issue. One of the best closing techniques is to use your natural charm to work some magic and build relationships with third-party contacts — and hey, you just might make a friend who will be beneficial in future transactions.
4. Be a pillar of confidence
In commercial real estate, you should always expect a bit of controlled chaos leading up to the closing. Facts and information uncovered during due diligence efforts, wrangling certifications, and relying on the aforementioned third parties often litter the path to the closing table.
But while each transaction is important, it’s never more important than it is to the client. Third parties such as appraisers, lenders, title companies, tax and zoning authorities, insurance reps, and other participants will often have you and your client chewing your fingernails right up until closing takes place. In these times, it’s important you don’t let minor upsets rattle you. Remain calm, cool, in control, and confident, and your client will mirror you.
Building in additional lead time is another related technique and helps alleviate some of the stress. While some tasks need to be completed as close to closing as possible (for legal purposes), doing your part ahead of time will help offset some of the closing mania — and helps your client rest easier, too.
As a CRE professional, you’re no stranger to challenge. In many cases, it’s part of the fun. And you know that, often, the greater the obstacle, the bigger the reward. By mastering these closing techniques, you can multiply your success, exceed client expectations, and significantly boost your income.