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Can a residential agent transact on commercial deals such as leasing and sales of commercial property?

Asked by Jackson, Bay Area,CA Sat Jul 28, 2007

And what are the advantages/disadvantages with going with either?

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Unless the resendential agent has an expertise or is "fluent" in commercial real estate, I would use a commercial real estate agent. It's like when you're sick... are you going to seek medical advice or are you going to ask your mechanic to help you?

A commercial real estate agent will know the "ins and outs"; know the "what ifs"; can help refer you to financing professionals, developers, attorneys; can give you the demographics.

Another option, is for you to seek the advice of a real estate attorney that regularly practices in sales and leasing of commercial property. That's what I would do, but then I'm biased as I'm also an attorney.
0 votes Thank Flag Link Sat Jul 28, 2007
My answer would depend upon the skill set appropriate for the specific commercial transaction.

What knowledge does the agent need to have to conduct that specific transaction, and do they possess that skill and knowledge? Is an understanding of income statements, cash flow analysis, cap rates, vacancy rates, rent rolls, and internal rates of return necessary for the transaction? Most residential agents are not fluent in the above, but there are exceptions. Our firm primarily handles residential, but we have 2 agents who are very strong in commercial.

Not all commercial transactions require the knowledge above. On smaller commercial buildings, a value can often be determined by using comps. This may be especially true for an owner occupant of a small building. If a smaller transaction might be given less attention by a commercial agent who is frying bigger fish, then an agent who primarily does residential might be a better choice. The residential agent might better know the neighborhood and values might rely more on comps than income analysis.

Deborah Madey - Broker
Peninsula Realty Group, Inc.
(732) 530-7755
2 votes Thank Flag Link Sat Jul 28, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
Depends on your market. You may be able to do both or need to do both in your market. I think the smaller the market the bigger chance you have of needed to handle both. In larger and more complicated markets you perhaps should specialize. Commercial deals typically take much longer times to turn are more complicated in nature, and require different expertise. If your going to do it, think seriously about getting a commercial designation like CCIM.
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1 vote Thank Flag Link Sat Jul 28, 2007
Bruce Lynn, Real Estate Pro in Coppell, TX
The license allows both. However residential skills vs commercial skills are totally different. I would want to work with a Realtor that Commercial leasing and sales is their field of expertise. It is almost like comparing apples to cherries. They are both fruit but have different properties and experience.
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0 votes Thank Flag Link Sun Aug 12, 2007
Pam Winterba…, Real Estate Pro in San Ramon, CA
Yes they can. However, commercial real estate is a specialty. In fact, there are areas of specialization with the "commercial" heading. I'd strongly recommend a broker who specializes in commercial real estate for your commercial transaction.
0 votes Thank Flag Link Sun Aug 12, 2007
All terrific answers.

Bottom line, yes, a residential agent can transact on commercial property deals, both sales and leasing as no additional license is required. Just a real estate license.

Anyone, realtors or non-realtors can access, the nationwide MLS for commercial property.

Of course, any potential investor should check the credentials, references, education and production of a prospective agent prior to getting involved in a commercial transaction with said agent.

If a potential buyer or seller is concerned about a particular agent with regards to commercial transactions, ask for detailed references including names and phone numbers and then make the effort to check them out.
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0 votes Thank Flag Link Wed Aug 1, 2007
Some residential agents can do both effectively, although I would say the better agent to use, if you want to use one, is a predominantly commercial agent, who sells some houses occassionally. Leasing in a large market, especially searching for lease space, may be next to impossible to do for a residential agent completely. Most commercial leasing companies keep their own database of available lease spaces, a residential agent will not have access to this "private" mls of lease space. If you need a commercial agent to help you in the South Bay, let me know. I can find the right person for you.
0 votes Thank Flag Link Sat Jul 28, 2007
Mario Pinedo,…, Real Estate Pro in Beverly Hills, CA
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