Subtle Differences Between a Residential and Commercial Real Estate Broker
Real estate is a complex industry with many different disciplines. The innate structure of the industry demonstrates just how quickly it can become complicated. Even within the commercial space there is a tremendous difference between industrial, retail, and office specialties. The types of properties, client use and lease terms will vary greatly depending on the commercial domain. Between commercial and residential real estate, the disparity is massive, which makes finding the right broker for the job crucial to efficiently and smoothly closing a deal on the right space.
Running the Certification Gauntlet
While residential and commercial real estate may overlap in some areas and begin with the same initial licensing, they are vastly different. An exceptional broker who specializes in one area will often receive additional training via courses and professional development workshops. Certified brokers can choose to become accredited in different areas such as the Accredited Buyer’s Representative (ABR), or earn additional designations such as Certified Commercial Investment Member (CCIM), Certified Negotiation Expert (CNE), Certified Residential Specialist (CRS) or Certified Short Sale Negotiator (CSSN). Becoming a successful broker requires time and dedication, but the most invaluable asset is on-the-job experience.
Discerning Between the Similarities
There are many differences between commercial and residential real estate, but upon closer inspection, they can also be quite similar. Commercial revolves around the purchase, sale or leasing of a property for business objectives. This is typically thought to rely on investment-centric numbers, whereas residential, focusing on the needs of a family, will involve more intangible qualities such as emotion about the property. Of course, anyone who has grown a business from the ground up will understand how much emotion can be involved. In turn, someone making a residential sale or purchase for the sake of an investment will be able to make decisions with a lot less sentiment. Therefore, it’s always important for a broker to understand each client’s innate set of circumstances in order to best guide them through the transaction process.
Staying Current with Trends and Establishing Relevant Connections
Throughout the course of a real estate agent’s career, they will obtain a deep understanding of the current trends within their market sector. For example, knowledge of the commercial market allows a commercial real estate broker to leverage more business terms during a lease negotiation. Another key factor that sets the different disciplines apart are the types of connections built over a career. Relationships that are made in the residential real estate world will be different than those established in the commercial realm. For example, the process of a family moving into a new home will involve outside assistance from appraisers, inspectors, mortgage lenders, residential attorneys and an array of subcontractors. This differs vastly from a company moving into a new office space who will need to be connected with architects, commercial attorneys and contractors, furniture vendors, IT consultants and phone & data brokers. Working with an experienced real estate broker who has built relevant connections in that field can make a big difference in the quality of each process.
Regardless of the classification of the property you’re interested in pursuing, it is important to find a quality broker that knows how to negotiate terms depending on the type of contract that is being written. Real estate is a complex industry and a specialized broker will best suit your needs.