CHAPTER 3 Why You Can’t Use a Residential Realtor
I’ve occasionally come across business owners or decision makers trying to get residential realtors to help them navigate the world of commercial real estate. They each sell property. They each have a license. They are each experienced in navigating a deal. There are a few similarities for sure. But they don’t carry over the way you might think. Though both residential and commercial agents facilitate leasing and selling properties, the functions and variables involved differ greatly. One of the biggest differences lies in the leases and terminology. Residential agents typically focus on straightforward agreements and property types, while commercial agents specialize in complex financial terms and variables that are unique to business spaces. Commercial real estate involves detailed concepts such as capitalization rate, gross rent multiplier, internal rate of return, and lease structures that require specialized knowledge. Without this expertise, a residential agent may miss crucial details that could impact your business’s bottom line. That works both ways. Most commercial agents also aren’t experienced enough in the residential field to jump right into a home sale (though some commercial brokers started as residential realtors, such as myself, and could do that.) Second, as stated before, the biggest difference shows in the types 13
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