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Expert Advice for Working With Commercial Property Agents

Published: 06-30-23 Category: Marketing

Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.

Real estate in a town during a clear, sunny day.

If you’re interested in buying or selling commercial real estate, you should consider working with a commercial real estate agent. An agent can help you navigate the technical and legal landscape around investing and help manage your portfolio and find new properties.

However, it can be tricky to work with an agent if you never have before. Here, we’ll provide some useful tips on how to get the most out of working with your commercial real estate agent.

Why Work With a Commercial Real Estate Agent?

Commercial real estate agents are trained to handle the day-to-day aspects of finding, buying, and selling properties, so they can be an invaluable asset for investors. Below are just a few of the reasons you should consider working with a commercial real estate agent or brokerage.

#1 – It Saves Time

Expert Advice for Working With Commercial Property Agents

Above all, working with a commercial real estate agent saves your time. Agents can handle finding properties, negotiating contracts, vetting tenants, and compiling financial statements, so you can focus on managing your investments from a top-down level.

#2 – You’ll Get Better Negotiations

Negotiating real estate transactions can be difficult if you don’t have previous experience. A commercial real estate agent can help you hammer out the details of a lease/sales contract and negotiate to get you the best possible deal.

#3 – You’ll Enjoy a Professional Appearance

Most investors work with agents, and not having one could harm your professional reputation. Building owners might not take you seriously if you show up to negotiations without representations. Working with an agent says you mean business and are a serious professional.

#4 – You’ll Enjoy Expert Advice

Lastly, real estate agents provide a source of sound professional advice and guidance. They understand the intricacies of property markets and they understand what makes properties profitable. Additionally, they are fluent in the legal aspects of commercial real estate.

The Area of Specialization Matters

Commercial real estate is a big field, and different types of commercial properties are sufficiently different that it takes time and effort to learn the ropes. That is why you should look specifically for an agent that has experience selling your specific type of preferred property.

For instance, a real estate agent might have sold hundreds of residential properties, but have little to no experience with commercial properties. Similarly, a commercial real estate agent who primarily deals with industrial and warehouse facilities would not be a good fit if you wanted to work with office real estate.

Look Out for Conflicts of Interest

Like with most professional careers, conflict of interest is a very real possibility for commercial real estate agents. Agents can have financial ties that may compromise their capacity to work in your best interest. It is crucial you understand whether or not your agent has any conflicts before you rely on them for advice.

For example, if your agent represents both landlords and tenants, they may have an incentive to connect their clients to get double the commission fee. This potential conflict is one reason many investors prefer to work with agents who exclusively work with buyers/tenants or sellers/landlords.

What Kind of Skills Should a Commercial Real Estate Agent Have?

Like any profession, agents with the right skills are more successful. Below is a list of some of the key skills that commercial real estate agents utilize in their day-to-day work. These are the skills you should look for when hiring an agent.

#1 – Market Knowledge

Market knowledge is the mark of a professional real estate agent. A commercial real estate agent needs to have an in-depth knowledge of their niche and the information network to stay on top of current market developments. Good agents are always trying to learn more about current market conditions and how they can use them to their clients’ advantages.

#2 – Economics & Mathematics

Real estate agents also need to have a solid grasp of economic theory and mathematics. Reading and drawing conclusions from property metrics requires a firm grasp of statistics, and agents must be able to contextualize market behavior against larger macroeconomic trends.

#3 – Organization & Management

Real estate agents spend a lot of time performing management, so they need good organizational and scheduling skills. Poor organization is a surefire way to lose deals and alienate clients.

#4 – People Skills

Commercial real estate agents deal with people every single day of their job, so they need to have the right people skills and empathy. A good agent is one that is capable of creating lasting professional relationships

Important Questions to Ask Commercial Real Estate Agents

If you are vetting a potential real estate agent, be sure to ask the following questions.

How much experience do you have? You want an agent that has demonstrable experience as a successful commercial real estate agent. Ask for a portfolio of their previous work.
What property types and geographic areas do you specialize in? Your agent should specialize in the specific property type you want to buy/sell and the geographic area where you are active.
What commission rate do you charge? Commission rates vary depending on the agent and the transaction, but most agents charge a 5% to 7% commission on real estate transactions they facilitate.
What are your educational and training credentials? All states require commercial real estate agents to take a qualifying course and pass a comprehensive license exam.
Do you have CCIM designation? A certified commercial investment member (CCIM) designation means that your agent abides by the highest standards for education, training, and commercial real estate expertise.

Just like with investing, finding the right commercial agent to work with is a matter of doing your research and due diligence. As long as you take your time and vet your agent appropriately, you’ll find one that suits your needs.