By comparison, there are only two main categories of real estate, residential and commercial. Both are complex businesses, and as different as night and day. In Florida, Real Estate Agents receive their basic certification, a state issued license, from the same course work, but that is where the connection ends. Real Estate Agents are legally licensed to work in either field, or simultaneously in both, but are they always professionally qualified to?
Imagine a business owner wants to move a business and had a great experience with a residential agent who sold their house; is that agent qualified to expertly represent and negotiate in the commercial area as well? A business owner wants to buy residential real estate and a commercial broker leased them the perfect business location? Is the commercial broker an expert in the residential real estate market also? Carefully consider the following before answering.
Commercial real estate is business-focused. The property is sold, leased or used to achieve a predetermined business objective. Often times the objective is of an investment nature, with an anticipated rate of return on the funds invested. Commercial services are instrumental to business owners, and commercial property owners.
Residential real estate can also be of a business nature but predominantly revolves around the wants and needs of a homeowner and families, often emotional in nature. Residential services may involve selecting a home in a good neighborhood with amenities like a good school district, or just the opposite, a retirement community. Residential services are instrumental for persons who are looking to buy or lease a residence.
The differences between residential and commercial should be evident. Current market trends in both industries change daily and demand the diligent attention of either practitioner to skillfully represent a client.
There are different contractual forms, legal documents, property types, negotiation skills, terminologies, and evaluation tools just to name a few. A qualified commercial professional would be actively involved in the CRE community, often having insider information that ultimately benefits the business community. Member organizations are different for each. Since there are so many different property and transaction types, commercial platforms for listing, selling, researching properties are not open to the public. In residential transactions, buyers and sellers have access to public MLS, (Multiple Listing Service). Understanding and executing leases for each is different; contracts are different. Due Diligence in a commercial contract demands a clear understanding of how to structure the timeline. A commercial broker will be familiar with zoning issues, demographics, traffic counts and will have the skills to expertly negotiate the best deal on all parts of the transaction. Local market knowledge is critical for both practitioners, and, requires analysis tools that are not the same. Transactional experience and particular skills set come from being rooted in either commercial or residential.
At the end of the day, we know we have given our clients our full and undivided attention by only practicing commercial real estate. We acknowledge we are not experienced to sell residential property and respect the hard work and diligence of those residential brokers who are expert in their field. We refer our commercial clients who are looking to purchase residential real estate to a specialist in that area—a residential broker.
The sleeping giant is awake; it is a great time to be in Brevard County. We have the most concentrated high-tech economy in the state fueling innovation, business development and related amenities like retail and restaurants. Great news for everyone – business individuals also need somewhere to live!
If you want to do business in Florida, please call a specialist at LBR to discuss a solution driven plan of action to buy, sell, lease, or invest in commercial real estate.
By Donna Garson