managing lease negotiations

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S I T I H A S N I Z A B I N T I R O S M A N

U N I V E R S I T I T E K N O L O G I M A R A ( U I T M )

MANAGING LEASE NEGOTIATIONS

TABLE OF CONTENT

1) Negotiating The Terms

2) Signing The Agreement

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NEGOTIATING THE TERMS

• Controlling the process

Cooperating brokers

Role of attorneys

Security deposits

Concessions

Rent schedules and rebates

Free rent

Length of lease period

Tenant alternatives

Cooperating Brokers

• A broker who participates in facilitating a real

estate transaction along with the broker who listed

the property. Often, the cooperating broker is the

agent who locates a buyer for the property and

represents the buyer's interests during negotiation

(while the listing agent represents the seller). The

listing broker typically splits the commission earned

on the sale with the cooperating broker.

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Role of Attorneys

• Understand that real estate is a process.

• Leave deal terms to the professionals.

• Accept the review as a loss leader.

• Manage the principal’s legal and financial affairs.

Security Deposits

• A security deposit is any money a landlord takes

from a tenant other than the advance payment of

rent.

• The security deposit serves to protect the landlord if

the tenant breaks or violates the terms of the lease

or rental agreement.

• It may be used to cover damage to the property,

cleaning, key replacement, or back rent.

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Concessions

• Another example of a seller concession involves a

seller agreeing to pay a certain percentage of the

buyer's closing costs, thus reducing the buyer's out-

of-pocket costs.

• In a competitive real estate market, the

abundance of housing choices may make a house

with a seller concession more attractive to a buyer.

Rent Schedules and Rebates

• For example, a 5-year building rent agreement may

specify that rents will go up 5% every year after the

first year. Some companies assume that the rent

expense should be recognized based on the rent

payments.

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Free Rent

• Not being subject to rent.

Length of Lease Period

• Length of Tenancy Agreement (lease) offered by

the principal’s.

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Tenant Alternatives

• Discuss a new rental rate as part of renewing.

• Most tenants approach a landlord to talk about

rent reduction because they want to stay in the unit

but feel like there might be better deals elsewhere.

SIGNING THE AGREEMENT

• Prospect hesitancy

Is this the best space available at the price?

Do the concessions meet my needs?

Should I act immediately?

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• Closing techniques

Sometimes it may be necessary to try different ways of getting the client to agree to rent or buy your property. The reasons for their initial reluctance may be varied, but often it could be as simple as nerves or the fear of making the wrong decision.

It is important to reassure the client that they will be in safe hands and to go over the benefits they will experience once they sign up. Show them any testimonials you have from your other clients - particularly if they are a well-known company.


• Follow up

Once the negotiations are over and the order

has been signed, make sure that you continue

your professional approach by taking the client

through the next steps - called consolidation.

Remember to thank them for their business

before you go any further.

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REFERENCES

• http://www.investorwords.com/19038/cooperating_

broker.html#ixzz3ewJDICEw

managing lease negotiations

Real Estate