I like to say I go both ways when it comes to Real Estate and have worked very hard to understand all types of transactions and their differences. Yes its so much cooler and sexier to sell big commercial projects but in reality I enjoy it all the majority of the time, even when things are not going my way. Over the years I have come to recognize a few clear differences in the way that commercial brokers handle their business against the way residential brokers. This is not a jab on residential brokers as they have many habits that the commercial world could adopt as well but in the blog post I want to point out a few that seem to repeatedly stand out as very helpful and smart.
Automatic Showing Scheduler – Just because you want to see a property doesn’t mean you get to see a property without reason. If a friend wants to see a fancy house for sale, all i have to do is go to the centralized showing site and schedule it and within hours we are inside taking a tour. That is far from how it works with commercial brokers. You call and leave a message and if they call you back they have a series of questions to fire off and gauge how serious you are about the property. Your pre approved? Well you better be ready to be asked what you do and how much cash you have on hand. Have you bought before? Some great questions that keep the hobby out of the business and if you pass that test, you may be given a few times that work into that commercial broker and the sellers schedule. And no they don’t feel bad for pushing you out a week or so due to vacations and conferences.
Showings – If you are able to get past the vetting process and the broker is willing to schedule a showing, you better believe they will most likely be there as well for the entire tour. Actually they will run the tour and be willing to answer specific questions on behalf of their seller. They will negotiate with confidence, talk about commissions and probably give you and your Realtor specific instructions on how to structure an offer all while showing the space. Yes a commercial broker may even talk to a buyer directly and all but close the deal for everyone involved. The showing is the best place for deal making.
Prices are negotiable – Residential agents have a guilt associated with pricing a home perfectly where a buyer should feel inclined to close and in reality its one of the few added value services that come along with a residential broker. Commercial brokers on the other hand don’t care what you paid for a property, still owed on a property or where hoping to get so you have the down payment on the next property. The sales price is exactly what someone is willing to pay a willing seller. And nobody gets butt hurt over it. You ever ask a residential broker to tell you how they came up with a list price? It can become a very serious conversation but you ask a commercial broker and its based on possible rents, hopeful end user and a few recent sales. And thats even if they disclose the price.
Not disclosing list prices – Oh man this throws off the system for sure. I recently received an email from MIBOR our local Realtor board on an explanation on why commercial list prices many times are non existent or “withheld” or $1. It’s because Monday, Tuesday and Wednesday can all have a different price and we also want to know your user because if you are a bank or gas station, you had better hold your britches. Different users call for different prices as well because of wear and tear, desirability and how it affects a space. If we just gave prices we would not have the ability to change as the market changes.
So as you can see there are a few practices that commercial brokers use to give them a heads up and to create efficiencies for their own business and while they are not apples to apples, they do seem to have some validity across the board. See you at the next open house
Curt has been in the Indianapolis Real Estate business for over 10 years and spent his first years learning all aspects of commercial management and brokerage. He has had great success in managing existing commercial projects and new retail and office developments. Curt specializes in building owner representation and purchases in the Westfield Indiana market as well throughout the Indianapolis Metro area. Curt is passionate about growing the local Westfield community and in his free time volunteers with Westfield Youth Assistance and raising 2 children with his wife Jennifer.