Real estate has become a major area of business and it is important to remember that purchasing real estate, either as a residence or as a business deal requires a significant investment. Each piece of land, commercial or residential, has unique characteristics. Many real estate brokers specialize in the differing areas of real estate, such as:
- Appraisal: determining the value of the property
- Brokerages: assisting buyers and sellers in the actual transaction
- Development: improving land by adding or replacing buildings
- Property management: managing the property for its owner
The basic difference between commercial and residential real estate is that most homes are occupied by their owners while all commercial properties are potentially income producing. Although many people purchase homes and rent them out, that is not considered commercial real estate. Commercial real estate can be leasing office space, owning an apartment complex, selling real property along with or as part of the sale of a business, or even industrial or agricultural property.
There can be huge differences between a commercial real estate deal and a residential real estate deal (buying a home). Commercial real estate transactions can be much more diverse and wide-ranging than selling a home. Generally, the risk and potential liability exposure you face on a commercial real estate deal can be much greater than buying a home. Commercial real estate buyers must also consider hazardous materials and zoning laws, as well as whether the location is suitable for your business.
Commercial real estate property is also not given the same consumer protections as a residential real estate deal. The mandatory disclosures required in residential real estate deals may or may not be required in a commercial transaction, depending on the area. Also, there are greater protections in place for residential buyers than for commercial real estate deals. By obtaining the services of an experienced commercial real estate agent, you will take the first step toward ensuring you have all the facts when you go to closing.
For consumers considering investing in a commercial piece of property, it is best to work with a trained, experienced commercial real estate agent. These real estate brokers will help guide you through the complicated process of identifying and purchasing (or leasing) the best piece of property for you. Commercial real estate agents can often be very helpful as they may know of unlisted properties and can also be a great resource in assessing the value of the property.
Before committing to either a commercial real estate agent, or a residential real estate agent, it is important to find the right agent for you. Start by asking friends and family who they have worked with in the past and interview those agents. Make sure you are specific in what you are looking for so they can give you the best advice possible and will show you properties which meet your needs.
By asking potential commercial or real estate agents, or if you are looking to sell, asking your selling agent the right questions, you can get a better feel for the individual and company.
- How many listings do you currently have? It is important to know how many other properties the real estate agent is trying to sell and how many other clients they are working with who are looking to buy. Too many listings and they likely will not be able to give you the proper attention.
- How often will we be in contact? Knowing when and how you will hear from your agent allows each of you to know the other’s expectations so hopefully there will be no communication issues.
- How long have you been licensed? While time is not the most important factor, it sometimes is a good indication of experience.
- What designations/certifications do you have? Keeping appraised of trends and continuing education is the mark of a good realtor.
- What is your fee structure? Commission is typically a percentage of the sales price or a flat fee.
- Do you have a list of references? Realtors keep a list of recent customers. Call and ask if they were satisfied and if they would use the real estate agent again.