what are the difference responsibilities of a residential and commercial broker?

In Leasing Property - Asked by Mike P. - Apr 10, 2012
Report Abuse
Answer this Question

Answer(s)

Donald J L.
Broker/Agent
Fort Lauderdale, FL

Two basic differences are: Residential must disclose disclose disclose, and Commercial puts the due diligence on the Buyer and the Buyer's broker.

Apr 11, 2012
Report Abuse
TANG F.
Broker/Agent
Dumfries, VA

Additionally, Fair housing is a serious matter in Residential brokerage. Commercial brokerage does not have to do with tough Fair Housing rules.

Apr 12, 2012
Report Abuse
Alessandra H.
Broker/Agent
Chicago, IL

All the information that residential agent can not disclose to the buyer, a commercial agent MUST disclose to a buyer. It helps out the bottom line of the buyer or the leasee. Commercial transactions are based upon numbers and not a feeling.

Apr 13, 2012
Report Abuse
Stephen S.
Broker/Agent
Birmingham, AL

I agree with Alessandra. Mostly Commercial Agents deal with business properties and it is based upon Rate of Returns and based off of more business like decisions and cost versus returns and or potential profit or cost structures based on overhead. Residential Transactions are usually based on emotional decisions and colors, areas of schools, and neighborhoods etc. The laws for disclosure are exactly the same for both. But in either case you do not have to get a disclosure form signed by a company or usually LLC etc. they are considered smart investors and companies are considered basically “big boys” and can take care of themselves. However if a little old lady owns the property I would warn you to have all your disclosure papers and disclose, disclose, disclose.
Basically they are the same job, one is selling apples and one is selling oranges. One works with emotional buyers mostly and one mostly works with companies or retail tenants etc. that their decision is made strictly off of returns and performance of numbers and profitability so it is a hard decision made with no emotion but instead on company profit margins, etc.. I have been both and I couldn’t stand the Residential sales side after showing this couple a home that was listed for 3 hours that was exactly what they were asking for and was reduced to 50% of value based on a divorce and they didn’t buy because the guest bath was painted pink ($300 solution) based on a $350k home reduced to $175. There were 5 offers by the time I got back to office and it sold and closed in 20 days. My first commercial job was to find locations for a regional retailer that would pay up to 7% of total estimated sales for rents based off of CAM, Taxes Ins, with the utilities being separated, and we based the profitability of each store based on the Traffic counts, the income levels (within 5 miles of centers) and the typical jobs of the people in the surrounding 5 miles. Every retailer usually has their own formula, they know their job best and they understand it, usually better than most real estate brokers so you need to work together as a team or (at least listen VERY carefully to what they are asking for, because it is usually very strict and defined very well by them, and they don’t waste a lot of time looking at something that will not fit into their criteria) to find the right location in my opinion. I hope that helps…
Stephen

Apr 17, 2012
Report Abuse
Nancy G.
Broker/Agent
Rochester, NY

My colleagues answers are good but you really need a different skill set to understand commercial real estate. You can study at CCIM, work for a Broker/property manager/investor who may train you. You need to understand cash-flow, terminology used in commercial (e.g. NOI), traffic counts, etc.

May 7, 2012
Report Abuse

Welcome to Answers

LoopNet Answers is where the commercial real estate community shares what they know to help each other out. And it's all for free.

Ask a question to get advice from brokers, investors, professionals and local experts.

Answer questions to raise your visibility as a trusted advisor and build new relationships.

Ask a Question

Post Question