What are Commercial Real Estate Agents?
When most people think about what it means to be a real estate agent, they usually imagine selling single-family houses. However, that is one of the many properties real estate agents may work in.
If you’re interested in becoming a real estate agent, you must understand the key difference between commercial and residential real estate. This way, you can make an informed decision about which area you’d like to specialize in.
What sets these two types of jobs apart? Do they offer different salaries? Keep reading to find out the answers to these questions and more.
In the most basic terms, a real estate agent is in charge of arranging sales, rentals, and purchases of houses, buildings, land, or offices on behalf of their clients.
Though this is the primary definition, there’s much more than real estate agents do daily. It also doesn’t explain storage units or how an agent’s responsibilities vary depending on whether they work with residential or commercial properties.
What is the Difference Between Commercial and Residential Real Estate?
Commercial and residential real estate are the two primary forms of property. And the distinction between the two is simply about which kind of property an agent focuses on.
Commercial real estate agents help with commercial (business) property transactions.
All real estate agents must receive the same education and certification before practicing. After deciding what type of specialization they want, commercial or residential, they then take on additional training in their area of expertise.
Commercial vs Residential: How to Choose
Remember that the main distinction between residential and commercial real estate is the type of property you’ll offer. There are, however, a few lifestyle differences to consider.
For example, perhaps you’re attracted to earning higher commissions, which would lead to a higher income. In that case, commercial real estate may be the right choice for you.
On the other side of the spectrum, you may prefer a more laid-back atmosphere with greater flexibility and variety. If that’s the case, residential real estate is where it’s at.
The good news is that you can begin with the same real estate license, and then if you change your mind later on, you can always specialize. There’s no need to make a decision now – take some time to weigh your options and figure out what choice is best for you.
Can a Residential Real Estate Agent Sell Commercial Property?
While all real estate agents can sell both commercial and residential properties, many clients prefer to hire an agent with experience in one or the other. Selling a commercial property requires a different skill set than selling residential property, so agents who specialize in one tend to be more successful.
The more important question is, What kind of knowledge do you need in order to manage a specific type of transaction?
Your pre-licensing education taught you the basics, but to be an effective commercial or residential property seller, you’ll need to learn some specifics. To do that, we recommend getting some hands-on experience and working with a mentor who specializes in one or the other.
Differences Between Residential vs Commercial Real Estate Agents
If you’re looking to enter the realm of real estate, you must understand the key differences between a commercial and residential real estate career. They are as follows:
- Salary Range – Commercial real estate agents, make more money than residential agents for a few reasons. Their commissions are higher, and the marketplace for selling homes is steadier overall.
- Hours – Commercial real estate agents typically stick to the usual 9-5, 40-hour work weeks. Residential real estate agents often have to put in extra hours outside of the typical work day.
- Training – The training residential and commercial real estate agents endure during their careers look strikingly dissimilar. Many commercial real estate agents work for brokerages that offer more comprehensive, specialized instruction. Being able to do the math and analyze data fluently is critical for this career path, as they need to be versed in concepts such as business strategy, Net Operating Income, return on investment, different types of taxes, etc.
- Volume – There are far more private houses than commercial buildings. As a result, the commercial real estate market is considerably smaller.
- Transaction Length – On a residential property, the sale is quite straightforward. The closing of a regular transaction takes about 30-45 days. A commercial deal may take up to a year, but it is rarely completed in less than 60 days.
- Commissions – Commercial property generally sells for a much higher price than a typical home, so the commission is greater.
Another difference is that commercial brokerages tend to have stricter hiring requirements, making it harder to get into. The typical residential office culture is usually more laid back than the more “corporate” commercial sector.