I never will forget Estella’s reaction the first time I suggested she consider becoming my partner in commercial real estate brokerage. My wife had spent considerable time, effort, and money earning her law degree and had finished six and a half years working at two of the top commercial litigation firms in Chicago. She had also just been given a 50 percent salary raise and a guarantee for partnership in the 3rd quarter of the same year I brought the subject up: “You should consider joining me in this. You’d be a great broker and together we could make one hell of a team.” She thought I had lost my mind.
Estella had two fundamental misperceptions that most professionals have:
· She didn’t see herself as a salesperson
· Commercial real estate brokerage is sales.
When I asked why she thought she wasn’t a salesperson, I realized it was because her definition of sales was the stereotype: pushy, high-energy, ridiculously over-the-top positive and trying to convince someone to buy something they don’t need in the first place. At the time, she was not only the top associate litigator at her law firm, but she was also the hiring associate, teaming with a partner to interview all new potential candidates.
In her role as an attorney, she considered all of the arguments for and against a certain course of action for her client, determined what would be the likely outcome, and helped her client understand the direction that needed to be taken. In her hiring role, she helped candidates understand the mission of the firm and the specific skills needed to be successful so the candidate could start forming opinions about whether or not they were a match, while simultaneously formulating her own opinions about whether or not the person was a good match for the firm.
I asked her to consider that everything she was already doing was indeed sales, because the same tasks are exactly what high-level, successful salespeople do. I explained to her that when I’m tasked with selling an investment property, I’m not actually focused on selling the property. I’m instead working with clients (potential purchasers) to understand their businesses and investment goals, then educating them and helping them understand an opportunity (an investment property) to determine if it is a good match for them. Most commonly, the opportunity is not a good match and I am the one instrumental in helping the client determine this. Sales is leading clients to make solid, well-thought-out, educated decisions, not about convincing someone to buy something.
The second major misperception most professionals have about my industry is that commercial real estate brokerage is sales. Although sales is certainly a component of what I do, brokerage is not sales. I repeat – BROKERAGE IS NOT SALES. Many people try to be commercial real estate brokers but are really only salespeople (and certainly not good ones like I describe above). They work their jobs to earn a living and live from deal-to-deal scratching out commissions and hoping they can always find the next deal to hock. These people are usually short-lived in the industry, but unfortunately perpetuate the stereotype which causes the misperception.
A good commercial real estate broker understands the market, product, financing, client business plans, trends, rents, expenses, and everything else related to his or her trade. A broker is the only common denominator in a transaction, meaning that the broker must understand every person in the transaction (buyer, seller, opposing attorneys representing their clients, inspectors, appraisers, political figures, lenders and loan committees, title officers, and countless others in any given deal), communicate effectively with all of them, and negotiate solutions for every person in a transaction. Without a professional, intelligent, thoughtful broker in the transaction, the probability of a closing decreases significantly because there are so many people involved with such disparate goals.
Estella got it immediately. She left her law career and became a professional real estate broker. Within one year she was already matching my production. In our experience, the most successful brokers are those who come to the industry from other careers. Estella changed from law. I changed in my early 30’s from business and entrepreneurship. Other successful brokers at our firm, or whom I know in the industry, have transitioned from law, finance, appraising, small business ownership, banking, and a host of other fields, many of which have no relevance at all to the commercial real estate industry.
Why consider commercial real estate brokerage? Because you are starting a business for yourself, just not by yourself. You don’t have to invest capital to begin. Yes, it is hard work and takes time to cultivate, but you probably already work hard at what you’re doing now, right? The benefit in applying it to commercial real estate brokerage is the ongoing pipeline of business from clients who value your service, which creates a very high income (if it weren’t significantly more than Estella would’ve made as a partner in a law firm, she probably never would’ve taken notice in the first place), and a lifestyle that allows you to enjoy the fruits of your labor.