Commercial Real Estate Agent vs Broker vs Realtor: What’s The Difference?
When you think of the terms commercial real estate agent, broker, or realtor, do you use them interchangeably? We often give a name to someone who helps clients buy or sell commercial real estate without considering each unique position, their responsibilities, education, certification or licensing, and expertise. Muddying the waters further, each state in the country has different licensing requirements professionals must achieve to list and sell commercial properties. It’s no wonder commercial real estate agent vs broker vs realtor remains indistinguishable!
If you polled most individuals, a commercial real estate agent, commercial real estate broker, or commercial realtor are often considered the same. That said, understanding the nuances between a commercial real estate agent vs broker can help you make a better-informed choice when seeking a commercial investment property for sale. So, stay tuned to receive the actual definitions for a commercial real estate agent, broker, and realtor. And learn how each professional contributes to the industry.
What Is a Commercial Real Estate Agent?
A commercial real estate agent works with clients to buy, lease, rent, or sell commercial properties. They act as intermediaries in the real estate process and provide guidance based on data analysis and industry knowledge.
What Do Commercial Real Estate Agents Do?
To assist clients in listing and purchasing residential or commercial property for sale, a commercial real estate agent must receive a license from the state where they reside. After completing a course of study and passing state-regulated exams, a commercial real estate agent becomes a licensed professional. Despite licensing, the law requires that a commercial real estate agent work under a commercial broker or for commercial real estate companies. You cannot work or list commercial properties independently as a commercial real estate agent.
A commercial real estate agent receives a commission for assisting their clients in buying or selling a property. Typically, the commission for a commercial property is in the 4-8% range of the sale price. After completing the sale, the listing agent, the buyer’s agent, and each agent’s broker share the commission.
Commercial real estate agents are the go-between for all interactions involving the buyer and seller of a property. They make offers and counteroffers between their clients and the other party, promptly, and communicate questions or concerns on behalf of their clients. When an offer is accepted, they help their client correctly fill out paperwork to complete the sale and transfer of property ownership. Commercial agents also inform their clients of any additional steps required for the deal to finalize; for instance, a commercial property may need an inspection before closing the sale. And finally, the most exciting moment for a commercial real estate agent is informing their clients of the closing date and providing keys to the new property owners!
What Are the Two Roles Commercial Agents Fill?
Commercial real estate agents fill two types of roles: commercial listing agents and buyer’s agents. While commercial agents are trained and capable of working for a client in either position, it’s considered a conflict of interest for an agent to act as the buying and selling agent for one transaction; however, the practice is legal in some states. Here are more details about what each type of commercial real estate agent is responsible for on each side of the transaction:
These professionals represent the property seller. Typically, listing or selling agents are responsible for staging and showing your property to potential buyers. They schedule open house showings, advertise and promote their open house events, and coordinate private showings around their client’s schedules. Listing agents post their property on LoopNet, Crexi, Zillow, and others and may advertise or promote them on social media. Listing agents will also perform comparative market research and advise clients on how to competitively price their properties while keeping an eye on similar listings. They can tell you when they think it’s time to lower a price and when to accept a bid. During the negotiation process, listing agents manage communications between the seller and the potential purchaser. They can help you decide on closing costs, sale prices, and fees. And finally, at the end of a successful sale, the listing agent will prepare, submit and file documents of the sale and the property’s change of ownership.
These professionals represent clients seeking to purchase a commercial property. They are responsible for discussing the client’s wishlist of features for their new commercial real estate. A buyer’s commercial agent should help the client differentiate between a “want” and a “need” regarding the property they want to purchase. There is no such thing as a perfect property, so the client needs to uncover what aspects are most important to them. The agent will analyze data such as market demographics to help determine an ideal location. The buyer’s agent will also schedule a commercial appraisal and inspection and promptly bring the results to the client. They can also suggest commercial appraisal companies and inspection contractors if the client does not have one in mind. They can advise on what offers are reasonable and will take bids and counteroffers back and forth between the seller’s agents in a prompt manner. When a sale is final, the buyer’s agent will prepare, submit and file the necessary documents for the property to change ownership.
What Is a Commercial Broker?
A commercial real estate broker assists clients with buying, leasing, renting, or selling commercial properties. Commercial brokers act as intermediaries in the process and guide their clients. Sound familiar?
What Does a Commercial Broker Do?
A commercial real estate broker can do everything a commercial real estate agent does but is also licensed to employ agents and collect a percentage of the employed agent’s commissions. A commercial real estate agent needs extra training to become a commercial broker.
Much of a commercial broker’s day-to-day work is the same as a commercial real estate agent’s. They work with the property buyer or seller and complete the different responsibilities depending on the part of the transaction they represent.
There are three roles a commercial real estate broker fulfills outside of a typical commercial real estate agent job, as follows:
- Associate Brokers have a license but work at an existing commercial brokerage firm to gain experience or just for the convenience of not starting a business from the ground up. Generally, associate brokers don’t supervise other agents. These commercial brokers have the most similar job to commercial real estate agents.
- Managing Brokers oversee the day-to-day aspects of other associate brokers and agents in a commercial brokerage firm. Managing brokers can be the middle management of the commercial real estate world but also refer to the commercial brokerage’s founder. They don’t often work directly with clients but can if they have the time or desire to assist. Most of the time, managing brokers look after the daily operations, transactions of sales, and office management for the commercial real estate brokerage firm. Also, these professionals hire and train new commercial agents, brokers, and administrative staff.
- Principal/Designated Brokers ensure that the commercial brokerage’s agents comply with state and federal laws.
Commercial real estate brokers receive commissions on the sales their agents produce and decide how involved they want to be in the overall deal. They get a higher commission when acting as a commercial real estate agent.
What Is a Commercial Realtor?
Most confused with commercial real estate agents, a commercial realtor (officially written as REALTOR®) is a copyrighted professional membership, not a job title. To be a realtor, a commercial real estate agent, broker, or professional must belong to the National Association of REALTORS® (NAR). NAR, the most prominent trade organization in the United States, has over 1.5 million members and over 200,000 registered realtors. Licensed commercial real estate agents and brokers apply for membership to their local association and must meet all requirements at their regional and national levels. Commercial realtors can initially be commercial brokers, agents, or other commercial real estate professionals such as appraisers.
How Do You Become a Commercial Realtor?
After passing an application process, commercial realtors pay monthly duties and fees and maintain the NAR Code of Ethics. The Code of Ethics includes the Preamble, along with 17 Articles, traditionally categorized into three main topics or duties. The Preamble and three major sections of the Code of Ethics are detailed below:
- Preamble – The Preamble of The Code of Ethics states that all NAR members must comply with ethical standards during all business dealings. The Preamble also states that realtors must memorize all 17 articles. Additionally, a commercial realtor is expected to demonstrate honesty, integrity, fairness, and moral conduct in all areas of their professional lives.
- Duties to Clients and Customers – The second section of The Code of Ethics contains articles that pertain to a realtor’s obligations to their clients and customers. These articles outline how realtors are expected to “Protect and Promote” their clients’ best interests when buying or selling a commercial property. Therefore, realtors are honor-bound to divulge property details regardless of how they affect their sales. This section of The Code of Ethics also bans realtors from being purposefully misleading or biased in their advice about a commercial property or neighborhood. Realtors are also held to a higher standard concerning how quickly they submit offers and counteroffers. And lastly, realtors must shield and act responsibly with confidential information and adhere to state laws on confidentiality.
- Duties to the Public – Realtors are expected to act with zero discrimination based on race, color, religion, sex, disability, nationality, sexual orientation, gender identity, or familial status. They also cannot disclose information about a neighborhood’s race, religion, or ethical makeup. Realtors also cannot show favoritism to any race, religion, color, sex, disability, nationality, sexual orientation, gender identity, or familial status when selling commercial property. Failure to comply with these standards can result in expulsion from the NAR.
- Duties to Realtors – The last section of The Code of Ethics outlines how realtors behave concerning their peers. To comply with The Code of Ethics, all realtors must respect their fellow realtors and never purposefully make false statements about others in the industry.
Becoming a commercial realtor requires much work. First, you must have a valid real estate license and work at one of the commercial real estate companies in the state of the desired association. You can’t have civil judgments for the last seven years that violated civil rights laws, real estate license laws, or other laws prohibiting unprofessional conduct. You must agree to adhere to the NAR Code of Ethics, bylaws, rules, and policies.
After meeting the requirements mentioned above, you must write an application for a membership and have that membership accepted by a REALTORS® Principle. Then you must attend the orientation course and admit to any Code of Ethics violations, pending ethics complaints, discipline, or arbitration requests. Any unpaid arbitration awards or other unpaid financial obligations related to any other association are considered. After your application is accepted and you submit your first month of duties and fees, you can claim the title of REALTOR®.
Benefits of Being a Commercial Realtor
After all the hassles and red tape, why would any commercial real estate agent want to become a realtor? Are there impressive and helpful benefits that come along with the title? Here is a short list of the largely overlooked aspects of being a commercial realtor:
- Designation: Commercial realtors receive the prestige of using the REALTOR® name, which is backed by one of the largest trade associations in the United States, the National Association of REALTORS®.
- Networking: Increase access to more extensive and untapped communities that will help you grow substantially as a REALTOR®. There are more than 1,100 local associations in more than 54 states and territories.
- Commercial MLS: The Multiple Listings System is typically known as the “end-all, be-all” of real estate listings. Commercial MLS, much like its residential MLS counterpart, is the holy grail of real estate listings, only accessible by a REALTOR®.
- Exclusive Resources: Commercial realtors receive discounts and access to employee benefits, insurance policies, banking solutions, marketplaces, educational courses, and more.
Find Commercial Realtors Near Me (Columbus, Ohio)
When considering buying or selling commercial property, deciding whom to partner with is essential. While there are wonderful and skilled professionals at each level of a commercial real estate agent, broker, or realtor, it is critical to know what the professional can offer according to your specific needs.
If you want to buy or sell commercial real estate in Columbus, Ohio (or the surrounding region), dig deeper than simply typing “commercial real estate agent near me,” “commercial real estate brokers near me,” or “commercial realtors near me” into the search engine. With nearly 85 years of industry expertise, The Robert Weiler Company is prepared to offer an outstanding team of skilled commercial real estate professionals: commercial real estate agents, brokers, and realtors. Our commercial brokerage firm can help commercial real estate buyers, sellers, investors, and developers with an unparalleled solution for uncovering the perfect deal that meets your needs.
Are you ready to start looking for your next commercial real estate investment? Or are you prepared to get your commercial listing out on the market? Give a commercial real estate agent in our office a call at 614-221-4286 or email us at firstname.lastname@example.org.