In the state of Pennsylvania, we have one category for licensed real estate salesperson, one for licensed associate broker (a broker who is NOT the broker of record), and licensed broker of record. We don’t have categories for residential agents vs. commercial agents — yet a huge gap exists amongst real estate licensees.
So any licensed agent can sell any property, anywhere in the state. Legally, that is. Practically, that is not a true statement. I — in northeast Pennsylvania — am certainly not going to list or try to sell a property near Pittsburgh, on the other side of the state. I don’t know the area, the properties, or anything about the region. I will find a good agent out there and refer the deal, but I won’t list the property.
So why is it that agents who are trained and sell almost exclusively residential properties think they can adequately represent a seller or buyer in a commercial transaction? The same analogy follows, I believe. Selling a $150,000 house, 3 bedrooms 2.5 baths, is not at all similar to selling a $1.2 million gas station or strip mall.
Why can’t we all just get along?
To paraphrase a famous news quote, “Why can’t we all just get along?” Residential vs commercial agents seems to be an agelong dilemma.
Residential agents think they can handle the most complicated deals, even when they truly are out of their league.
Commercial agents get annoyed at all these “amateurs” playing in their sandbox.
I have seen both sides sniping at each other and their “right” to be in the deal at all.
It doesn’t have to be that way. What’s the goal? Seller finds a buyer, buyer finds a property. We should be able to work together to get the deal done, whether that means referring it out to an expert or working side by side with one. The two sides don’t have to be enemies or combatants.
I was told recently by someone that commercial agents have their own circles, and they only talk / share info with other commercial agents. That’s just silly. But at the same time I can see their side, that residential agents get in the picture and the deal becomes 10 times harder, because of all the extra work the commercial agent has to do to make it happen, because of the residential agent’s lack of expertise.
CAN legally sell vs. SHOULD try to sell
I once overheard an agent “on duty” take a phone call from a consumer, who asked if the agent could handle a large commercial listing. “Of course! I can sell any kind of property at all in this state!” she replied, confidently.
Yet I knew that she had rarely handled any commercial deals at all, and probably had no business taking that listing, which did indeed turn out to be over her head / capabilities. She was out of her league, but would not tell the seller that.
In fact, I watched her spend hours spinning her wheels trying to get a handle on the property, fielding calls she had no clue what the answers were. That listing expired, and a commercial specialty firm picked it up after her failure.
“But my license says I am legally allowed to list and sell commercial,” the argument goes. Yes you are. But are you truly capable? Do you understand the financing, the nuances, what a Phase I environmental study is? Maybe, but maybe not. Are you representing the sellers adequately if you do not know these things?
Just because legally you CAN list a property out of your realm of expertise (location, type, etc) does not mean you SHOULD. Period.
What do you do?
So if you get a lead on a commercial property — a large deal. A big fish. That property that other agents salivate over and it lands in your lap… yet you feel in your gut that you may be stretching. What should you do?
You want the listing. You can taste it! You don’t want to lose it all. But you don’t want to screw this up either.
Refer it out
Is someone in your office a commercial guru? Refer it to him for a fee. Or go out of office to a commercial brokerage, and give it to someone who CAN handle it. At least you’ll get a piece of something, rather than zero when it expires.
Find a partner
This is what I have done. I am the broker of record, own my own office, and have listed and sold commercial properties over the past 10 years. Yet I admit I don’t know it all, and sometimes I have too much on my plate to devote to a single large commercial parcel.
My solution was to find a partner. Someone I trust, and work well with side-by-side. I found that in a commercial agent from a nearby city. When I list a “good” commercial property, I bring him in and we tag-team the deal. We split the commission, and co-list the property. Both of us work the deals and we complement each other’s strengths.
I am the local angle, he works national. When someone needs to be on site, quickly, it’s me. When someone needs to push out marketing materials nationally, it’s him. I enter it on local MLS’s and he does it with the commercial websites. And we share the proceeds of whatever we sell.
Sometimes I feed him buyer or tenant leads, other times we’re listing commercial properties side by side. It works. But you have to find someone who works well with your personality, and someone who you trust implicitly. Any doubts and it doesn’t work — kind of like marriage. It is sort of a business or work marriage. Trust is the key.
Want to work commercial? Get help.
Commercial is indeed a different animal. It is not another house that you can just pop a sign on and put in the MLS. There are different skill sets needed and if you want to get your feet wet in it, just get some help.
Ask someone to be your mentor, or to share deals with you. Find a partner, someone who will help you get started. Just get help, because especially in today’s economic environment, you’re going to need it.