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Make Sure You’re Not Being “Set Up” By Your Commercial Real Estate Brokerage Clients and Prospects

By Jim Gillespie | October 22, 2013

Years ago I was pursuing a listing on a building and I was teaming up with two other brokers in my office in going after it. We drove about 30 minutes away from our office to make our presentation, and in the time just before and after our presentation we saw the two teams of brokers who were competing against us.

While we were driving back to the office from our presentation, I realized that I already knew who the perfect buyer was for this property. So once I returned to the office I called the prospect, we then met at the building, and after touring the building he then told me that he wanted to buy it.

So later on in the day, about 2-3 hours after we had made our listing presentation, I called the owner and then had the following conversation with him:

"Hi Jeff. This is Jim Gillespie. When we were driving back to our office after our listing presentation I realized that I already have the perfect buyer for your property. So I’ve now shown him the building and he’s ready to now move forward and buy it."

"Jim that’s fine, but we’ve already promised the listing to another brokerage company."

"But Jeff, you haven’t signed the listing yet, have you?"

"No, Jim, but we’ve already promised them the listing. So any offer you submit to us will need to go through them."

I immediately recognized what was happening. The owners had already decided on the brokerage company that they would be listing their property with before any of the three brokerage companies had made their listing presentations. Me and my team had just been set up, and we were being utilized as one more brokerage team to help the owners do their due diligence…so they’d have three listing presentation packages in their hands that would now serve as a record to anyone showing that they’d interviewed three different brokerage companies.

You don’t ever want to be caught in a position like this one as a commercial real estate broker. We ended up making the deal and successfully selling the building to my buyer, but we ended up splitting the commission with the brokerage company that the owners had been promising the listing to all along.

In order to avoid being stuck in these kinds of situations in the future, ask your owners the following kinds of questions whenever you’re pursuing a listing with them:

1) Are we the only company that you plan on speaking with about listing your property?

2) If you like what you see and hear from us during our listing presentation, will you be moving forward and listing your property with us?

3) As of right now, are we the one brokerage company that you believe will be listing your property, and then moving forward and selling it for you?

Whenever you ask these kinds of questions, look for any incongruence whenever the person is responding back to you. If they hesitate, stumble, or seem uncomfortable whenever they’re answering these questions for you, this could be an indication that you’ve got some very stiff, yet veiled competition when moving forward and trying to land the listing.

So once you get any kind of a hint of this, you’ll want to ask the owner more detailed questions to determine whether or not they have a solid relationship with another brokerage company already in place, and whether or not you’ll even want to move forward in trying to land this listing. 

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Author of the N.Y. Times #1 Best-Selling Book Ever Written
On Commercial Real Estate Brokerage,
"Winning Through Intimidation"

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