Over the last 12 months, our team at RCR has noticed an unfortunate trend in the commercial real estate industry of brokers not knowing their worth. More than ever, as the market has tightened, we are seeing brokers take it on the chin from their clients, other brokers, or even from their own firms. The industry is brutal and succeeding as a commercial real estate broker is challenging in good market conditions. In a competitive landscape, it can be all too easy to underestimate your value as a broker. Knowing your worth is not just about dollars in your pocket; it is about recognizing the expertise, effort, and value you bring to the table—and ensuring your clients and colleagues do too.
Why are brokers undervaluing themselves? Unlike a physical product, the value of your expertise and services can be harder to quantify, making it tempting to downplay your contributions. Despite the value they provide, many brokers struggle with self-doubt and underpricing their services. We have seen the fear of losing clients to competitors lead brokers to undercut their fees. This seems especially prevalent with younger brokers who need to transact often and with larger firms who lack bandwidth and oversite to monitor their brokers and what terms they agree to with clients. We have seen increased client pressure as some may try to negotiate lower fees, claiming that your work is replaceable or less complex than it is. Recently, we saw a young listing broker transacting for free just so the firm could retain property management services. Needless to say, all of this is damaging to the industry.
So, what is the unique value of a CRE broker? Your connections to property owners, buyers, other brokers, developers, contractors, and industry professionals make transactions happen. But your role extends far beyond facilitating transactions. You are a trusted advisor, market expert, negotiator, and in today’s environment more so than ever, a problem-solver. Each of these roles carries significant value. Market knowledge is vital, especially as many properties trade off market. Access to data and insights about trends, property values, zoning laws, and tenant demands give you knowledge that clients can rely on to make informed decisions. Your ability to secure favorable terms can save clients significant time and money, providing a clear return on investment for your services.
Now, I want to address the customers that may be reading this, those of you who work with commercial brokers or are considering engaging a broker. Not all brokers are equal. We know that some of you have had bad experiences with brokers—we have seen it. Some brokers are poor communicators, don’t provide the attention that you deserve, busy with too many listings, making you just a number. Some serve as paper pushers instead of advisors and don’t turn out to be the market experts that they portrayed themselves to be. Not all brokers are like that so interviewing and selecting the right one for your needs is paramount. Quality brokers provide value in a transaction from beginning to end.
Brokers-quantify your value. Translate your services into measurable benefits for clients. How much time or money do you save them? How do you help them avoid risks? Being able to articulate this clearly builds confidence and justifies your rates. Setting clear boundaries avoids falling into the trap of over-delivering or offering free services to win over clients. Be clear about what your services are and connect the value of each element. Communicate your expertise using your marketing materials, presentations, and client interactions to highlight your achievements, success stories, and unique qualifications. Ensure you execute on what you pitch and provide the value your client deserves.
Most importantly, be selective. Not every client is the right fit. Work with clients who recognize and appreciate your expertise rather than those who prioritize cost over quality.
- Build stronger client relationships based on mutual respect.
- Don’t undercut other brokers for the sake of transacting.
- Focus on high-value opportunities rather than spreading yourself too thin.
- Enhance your professional reputation as someone who delivers top-tier service.
- Achieve greater job satisfaction, knowing you’re compensated fairly for your efforts.
Of course, the client comes first, but at Rich Commercial, we know brokers are important. Each commercial transaction is unique and presents different challenges. Without brokers, there would be far fewer transactions.
