When you first began working as a commercial real estate broker, you probably weren't too concerned about the type of clients you might get. You were just happy the phone was ringing and were more than willing to work with any client that might come your way.
As your business has grown, however, you have learned that not all clients are created equal. While most are a delight to work with, there are those one or two names you dread seeing when your phone rings. In the back of your mind, you probably know that it's time to fire those clients. Or is it?
It may still be hard to turn down a client—you may stand to earn a lot of money, after all. And 90% of the time, you should in fact persevere. But there are those rare occasions when there is a business case for letting a customer go.
If you’re wondering about a current client, ask yourself these two questions.
Does this person treat you like the wait staff?
You’ve closed hundreds of deals. You've paid your dues. Instead of seeing you as a respected broker and knowledgeable advisor, however, your client treats you more like the pool boy. If your client expects you to drop whatever you're doing to show them a property immediately, or calls multiple times leaving terse messages while you're in a closing and unable to return phone calls, it's a good sign they don't respect you. Same with chronically showing up late or missing appointments.
If the client persistently shows little regard for you or other people they have dealings with at your brokerage, you should let them go. The emotional effort it takes to deal with them can be a drain on your mental health, and you have better, more lucrative ways to use those resources.
Beyond that, though, it’s important to remember that commercial real estate is all about relationships. Working with someone who is disrespectful to your colleagues can reflect poorly on you. A majority of deals are done with both an owner and occupant rep, and if your client acts rudely toward other professionals, that can take a toll on your relationships with them as well.
Are you getting a good return on your time investment?
Okay, this one is a bit harder to answer. Deals in commercial real estate can take many months to come through. There might not always be a clear answer, but the best brokers always have this question on their mind.
Let’s say the client brought you on board because of your experience in listing commercial real estate, but when you show them what their property is currently worth, they balk at the suggested listing price and want to list it for something higher. Way higher.
Or maybe your client dreams of opening their own pie shop or oil change place, but it's 12 months later and not only have you not made an offer on any of the 135 properties you've shown them, the client hasn't even completely gotten their financing in place.
In either case, you’re going to end up pouring more and more time into the relationship when the client’s expectations are way off. While many relationships are years in the making and are built on respect and mutual accountability, be wary of those clients who demand an inordinate amount of your time—and have an uncertain return.