Commercial and residential real estate brokers are part of the same industry. Despite both agents working in real estate, their primary distinction lies in the type of property they specialize in.
Residential Real Estate Agents
Residential real estate agents assist clients with buying, selling, and renting property intended for personal use. They provide guidance throughout the transaction process, ensuring that clients find suitable homes.
Commercial Property Agents
Commercial property agents handle real estate used for business or investment purposes. They advise investors on risks and help ensure a return on investment (ROI) through property acquisition and sales. Additionally, they lease properties, locate new spaces for assets, and find new areas for clients' businesses.
Factors to Consider
To further elaborate on the differences, several factors need consideration, such as the skill sets each agent possesses, the types of transactions they handle, and the nature of the properties they deal with.
Properties’ Nature
The type of property is a crucial factor. It includes the number of housing units, building type, size, etc. For example, when buying or selling a property with more than four units, a commercial property agent is typically required. Such transactions often involve commercial real estate loans with stringent requirements that residential agents may find challenging.
Skillset
Both residential and commercial agents must possess specific skills to sell property effectively. Agents need perseverance, bravery, and strong communication skills. However, selling commercial properties necessitates a thorough understanding of economic principles. Commercial agents deal with concepts such as gross rent multiplier, cap rate, and internal rate return, which residential agents might not be familiar with.
Partnership
A residential real estate agent can collaborate with a commercial agent to sell commercial property. This partnership helps clients secure the best rates and provides independent analysis. Commercial agents often have access to databases of available lease spaces, which residential agents might not have.
Conclusion
In some instances, residential sales agents can sell commercial properties. Nevertheless, depending on the property type, it is advisable to select a knowledgeable agent. Choose a residential agent for personal use properties, while commercial agents are better suited for commercial real estate. Working with an expert ensures value for money and service.