I spoke with a prospective client today about next steps after our initial pitch meeting. He started the conversation aggressively and it soon became clear that he wanted to really understand and challenge my value in the lease negotiation.
His argument was essentially three points. First, he thinks that brokers will inherently favor the landlord and would be predisposed to cutting a quick deal. Second, he wanted to know if we really add any value, as he is a good negotiator. Third, using a broker is going to add time to the process.
My counter-argument was:
1. I’m going to be engaging the entire market, not just talking with his landlord. If I don’t do a good job negotiating on his behalf, he’s going to see it in black and white. Negotiating with multiple providers creates an active bidding process and ultimately drives price discovery. It’s impossible to favor one landlord over another if the bidding process is transparent to the client.
2. Regarding his negotiating ability, I’m sure he’s very adept. But real estate is the landlord’s arena. It’s impossible for a tenant to know as much about real estate and all of the associated nuances as the landlord. The tenant might secure a great rental rate, but not know to push hard on free rent or other concessions.
3. It will be quicker to do it himself if he is okay with leaving money on the table. But if he really wants to negotiate the best possible rate on his own, the amount of prep he’s going to undertake will far exceed the time commitment of using a broker.
Its easy for a tenant to call up the landlord and secure a quick extension on their lease. But hiring a competent broker will help ensure you’re getting the best possible terms.