I’ll preface my question by giving the answer first. A: There is no wrong answer.
Q: If you had to pick one of the following broker types that best describes your values as it relates to retail brokerage what would it be: the relationship, the deal or the fee (commission)? Or put more succinctly, what do you put most importance on in your real estate dealings? Are you a deal junkie, a relationship guru or a fee chaser? It’s probably safe to assume we, as brokers, think of ourselves as masters or maestros of all three broker types. However, the reality is more likely that we, as retail real estate practitioners, have stronger leanings to one specific ideology than the others.
Let’s ponder all three broker types for a moment:
The Relationship Broker – The broker that values the client relationship as paramount to any current and future deals. Put simply, the relationship between broker and client comes first. The broker aims to please and provide “white glove” service from day one in an effort to establish credibility, loyalty and appreciation from the client in exchange for loyalty and steady deal flow from the client both today and tomorrow. A broker will protect, serve and nurture this relationship to the utmost. The broker that puts the highest value on the client relationship probably has longstanding relationships that go back years that continue to pay dividends today. The broker that puts the highest value on relationships is willing to be patient even if a deal may not be in the immediate future. They have a knack for forging early and lasting relationships with new clients and sustaining them through high growth periods and tempered (maintenance mode) periods of expansion. The relationship broker type might be ideal for retailers that are methodical in their store growth or when retailer growth plans change on a moment’s notice. This broker will take it all in stride and their level of service generally does not waiver through thick and thin. They know how to maintain and strengthen their relationships through the high tides of active deal mode and the low tides of little growth or expansion. The relationship broker is widely respected within their office for their ability to cultivate client relationships and maintain them through the duration of their careers.
The Deal Broker – Also known as a “deal shark” or “deal junkie.” Who doesn’t like a good deal, right? Both landlords and retailers have an affinity for these type of brokers as they tend to put significant value on getting deals done in a concise, timely and seamless manner. Frankly put, they haven’t met a deal they didn’t like. The deal broker enjoys all facets of the deal and has a vast working knowledge of all sides of the transaction. A deal broker never thinks a deal can’t get done. They love the whole aspect of the deal and are willing to dig, dig and dig some more for ideas, documents, solutions and ways to make the deal happen. It’s safe to assume that we are all “deal junkies” in some way, but seeing an expert “deal guy” in action is a thing of beauty. A master of the chess board – they enjoy the “art” of the deal. A deal broker is generally considered a lethal ally of landlords and retailers and is the envy of their respective offices for their in depth knowledge of all facets of the retail world. Both retailers and landlords welcome business with this broker type for their creativity and solution-based thought process they bring to all their deals.
The Fee Broker – Ahh, the touchiest subject of them all…the commission guy. What’s wrong with looking out for number one? After all, we work in a commissioned environment and the responsibility and opportunity to earn a wage falls no farther than the individual broker’s shoulders. There is nothing wrong with putting a priority on earning a fee. Money drives many sides of the real estate transaction from retailers wanting to opening new and profitable stores to a landlord wanting to increase their NOI or a developer wanting to sell an asset to a broker looking to make a commission. The broker that values their fee at the top of their ideology is often focused, driven and committed to getting the transaction done in a timely and efficient manner. This can be an extremely valuable broker type on the landlord listing side. A landlord may want to get in and out of a deal as fast as possible and a broker who is focused on their commission may have similarly aligned goals. Fee (or commission) brokers probably tend to irk some of their counterparts because they are highly competitive. However, they have to be respected for their ability to stay focused on the transaction and manage the deal in a concise and expeditious manner. More simply, fee brokers can’t get a deal done fast enough. This can be a good thing for retailers seeking to expedite a roll-out or a landlord or developer with immediate leasing needs. They may be portrayed as not having their client’s interest first and foremost and are often accused of seeking higher than market commissions. Certainly both statements may be true at times, but a broker, to some reasonable degree, has a fiduciary responsibility to themselves to make earning a commission a priority within the deal. At their client’s expense? Definitely not. No doubt we’ve all encountered the fee broker in past dealings.
I’ve posed the original question to counterparts and prospective new hires over the past couple of years and the answers I receive never get old. If you had to pick one of the broker types that best describe your mantra, what would it be? As I mentioned earlier, the reality is we are all likely some combination of all three broker types. But if you step back and look at the most successful brokers in our business, I bet you will find that most have a dominant brokering style that is clearly distinguishable. Retail is a dynamic and ever-changing environment and a truly good broker is dynamic and adaptable to all that is thrown their way. Frankly, while we may not all like certain “types” of brokers you need all three broker types to be a successful and dynamic brokerage company as different deals and clients require different strengths and skill sets.
In its simplest form it’s an amusing thought-provoking question of one’s self as a broker. As for me, what broker type might I be? I’ll leave that for the water cooler or another blog. Until the next blog…
Tony Colvin | Senior Vice President
Mid-America Real Estate – Wisconsin, L.L.C.
648 N. Plankinton Ave., Suite 264 | Milwaukee, WI 53203
Direct: 414.390.1405 | Fax: 414.273.4605
firstname.lastname@example.org | www.midamericagrp.com