How to Become a Commercial Real Estate Agent
The real estate industry is not only ideal for investing, but it can make a great career option for the right person. If you like working with people and you’ve been successful in sales, you might do well as a real estate agent.
Most people only consider careers as residential real estate agents when they first consider careers in real estate. Still, commercial real estate is another option that could offer even more benefits than residential real estate. But it also has its downfalls, just like any other career.
So, you might be wondering how to become a commercial real estate agent if you’ve never researched it before.
Below you’ll find out all you need to know about how to become a commercial real estate agent, as well as what they do and what specialties you can choose from.
What is a Commercial Real Estate Agent?
When most people think of real estate agents, they think of someone who can help them buy or sell a home. But that’s only residential real estate agents.
Commercial real estate agents deal with complex transactions that residential real estate agents don’t have to deal with. Although residential real estate agents can represent both buyers and sellers, it’s more common for commercial real estate agents to do that.
So, what’s the difference between a residential real estate agent and a commercial real estate agent?
A commercial real estate agent helps lease or sell property, usually working with larger commercial properties like retail spaces or mixed-use buildings.
Commercial real estate involves every aspect of sales, leasing, management, investment, or improvement of:
- Businesses
- Farmland
- Medical facilities
- Investment property
- Retail property
- Industrial properties
As a commercial real estate agent, you’ll likely have to work with a variety of professionals, including:
- Lawyers
- Government officials
- Community leaders
- Industry leaders
- Banks
- Appraisers
- Title companies
- Zoning officers
- Mortgage companies
- Utility companies
- Accountants
Commercial real estate agents help their clients make important business decisions and help them understand the highest and best uses for certain properties. You might also advise them what the right kind of real estate investment vehicle might be right for them based on their investment and income goals.
Some commercial real estate agents even specialize in certain property types, such as:
- Office property
- Farmland that can be developed
- Amusement parks
Sometimes, commercial agents might specialize in certain types of consulting work for Real Estate Investment Trusts (REITs), utility companies, and/or insurance companies. Some commercial agents only work in areas of the industry like resort management or helping certain government agencies with the reclamation of land or the redevelopment of industrial sites.
What Do Commercial Real Estate Agents Do?
Commercial real estate agents handle various tasks in their jobs, just like residential real estate agents do.
However, their job duties look somewhat different when you take a closer look.
They’re responsible for the following tasks:
- Property Management – Helping property owners by leasing and/or managing the day-to-day situations that may come up in real estate investment deals. This might include suggestions on creating more value with the property (i.e., adding a vending machine, laundry facility, etc.)
- Property Leasing – Finding and screening tenants for an owner’s commercial real estate property, which might include advising about creating a niche for the property or help attracting better, longer-term tenants.
- Hold or Sell Analysis – Help buyers analyze the market to find the best use or course of action for a property and its owner through the use of cash flow projections and determining the internal rate of return and/or return on investment (ROI).
- Property Sale or Marketing – Helping people find the best way to get the most money for a property and find the most qualified buyer.
Think you’re ready to start the process of becoming a commercial real estate agent?
Here’s how to become a commercial real estate agent.
How to Become a Commercial Real Estate Agent
1. Take an Approved Real Estate Course
In most states, you have to take and pass a state-approved real estate course. Every state is different, so the number of hours you’ll have to sit through in a course will depend on your state. In New York, it’s only a 75-hour course, but in states like Texas, the course is 180 hours. Check with your state’s real estate licensing division to see how long the course will be in your state.
Also, check to see if your state has reciprocal licensing agreements with other states, which means that if you move out of state, you might be able to practice in another state without obtaining a whole new real estate license.
2. Pass the Final Exam
Once you’ve taken the course and completed all of the quizzes, it’ll be time to take the final exam. The final exam usually consists of a bunch of multiple-choice questions, and it’s usually proctored, so you’ll have to find your nearest proctoring location. It could be your local library or college. Find a location that’s convenient for you and start studying for the exam.
You get three tries in New York before re-taking the course all over again. So study as much as possible, so you don’t have to do that. You can even purchase study guides to help you absorb the material better. But ample note-taking is also helpful.
3. Take Your Real Estate Licensing Exam
Now comes the big test – the ultimate test of your knowledge. The real estate licensing exam is given by your state and is also proctored. You’ll have to choose a time, date, and location that works best for your schedule. Show up with your ID to your test site on your test date (and bring nothing with you).
The test usually consists of about 75 to 150 multiple-choice questions. You have to get a 70 percent or higher to pass the exam.
The proctors will provide number 2 pencils and calculators for the required questions. You’ll have different test booklets than the other test takers to prevent cheating so study as much of the material as you can before you take the test. Take some online practice tests, make flashcards, anything to get the material to stay in your head.
4. Find a Real Estate Brokerage with Commercial Deals
After you’ve passed the state licensing exam, you’ll need to transfer your license to a brokerage. So this is the part where you start searching for real estate brokerages that have commercial deals. Inform your broker at the interview that you want to handle commercial deals.
You could also find a brokerage specializing in only commercial deals if you want to increase your chances of getting the best commercial real estate deals.
Fees
It’s important to note that many brokerages have fees associated with joining so keep that in mind when going through the process. You may have to pay ongoing fees to remain with certain brokerages, as well as to remain part of national and state real estate professional associations.
5. Join a Professional Association
Joining a professional association, such as the National Association of Realtors (NAR) or your state’s real estate association. For New York, there’s the New York State Association of Realtors (NYSAR). Join both your national and state real estate professional associations, and you’ll be taken more seriously in the industry.
You should also join your local board of realtors, which can provide great benefits, including a support community, a network of fellow real estate agents, and special discounts and savings. When you apply to a brokerage, your broker will likely tell you how to apply to your local board and let you know about any fees associated with becoming a member.
6. Choose a Specialty
You might think choosing commercial real estate means you’ve chosen a specialty, but it goes a little deeper than that. In addition to being a commercial real estate agent, you can also choose from one of the following commercial real estate specialties:
- Retail centers
- Office buildings
- Industrial spaces
- Agricultural spaces
- Property management
- Residential leasing or apartment broker
- Short sale, foreclosure, or REO specialist
- Unimproved land
Research each of these specialties and see what would make the most sense for you.
7. Create a Business Plan and Marketing Strategy
Just like in any other type of business, if you want to be successful, you need to create a real estate commercial business and marketing strategy. That means writing down everything you’re going to do to generate leads, warm those leads, and get them to the sale.
But if you’re completely lost, you can find real estate business plan templates and real estate marketing plan templates online by doing a simple Google search.
8. Implement a CRM for Your Business
Every successful business owner knows the important role a CRM plays in their company. A CRM can help organize and streamline all of your customer data into one system. It can keep track of every single interaction you’ve had with each client and prospect so that you know where each of your clients is in the sales pipeline (how close they are to purchasing the property).
Keeping track of every interaction this way can help you make better business decisions and make everyone feel like you’re paying attention. And that can make all the difference in some deals.
9. Network with Other Professionals
Attending real estate networking events can introduce you to professionals in the industry you might not have otherwise had the opportunity to meet. These people can help open doors and opportunities that could significantly increase your earning potential. That’s why it’s always beneficial to be networking, even if you’re not attending any events.
Bring your business cards with you everywhere you go and give one to everyone you meet.
10. Explore Additional Career Opportunities
Working as a commercial real estate agent allows you to work in other areas of the industry outside of sales, which includes development (purchasing land and building on it, getting financing, negotiating tenant leases, and managing the whole process).
You might also consider salaried property management, which involves handling the day-to-day operations of properties, such as handling tenant complaints, dealing with repairs and maintenance issues, and staffing.
What You Should Know Before Becoming a Commercial Real Estate Agent
You should know that becoming a commercial real estate agent might mean less of a steady income because residential real estate transactions are a dime a dozen, whether you’re helping clients buy, sell, or rent. Also, with limited experience as a commercial agent, you might find it harder to locate deals. But that doesn’t mean you can’t learn from other agents and start building up your client base slowly but surely.
Benefits of Becoming a Commercial Real Estate Agent vs. a Residential Real Estate Agent
Becoming a commercial real estate agent has its downfalls, as we discussed in previous sections, but it also has its benefits.
They include:
- The commercial real estate market often bounces back from its lows
- It comes with more flexibility than residential real estate
- Unlimited earning potential
- Access to off-market deals
- Higher commissions than residential real estate
- Fewer competitors
As you can see, becoming a commercial real estate agent has its benefits.
Ready to Become a Commercial Real Estate Agent?
Becoming a commercial real estate agent has its benefits, especially compared to residential real estate. Bigger deals, higher commissions, and less competition. Are you ready to take the next steps to become a commercial real estate agent? Start researching the requirements in your state and find a state-approved real estate course so you can start on the path to becoming a successful commercial real estate agent.
ProspectNow has been around for over a decade (since 2008). The data that users can get from ProspectNow is a lot more expensive on other competing platforms. By using ProspectNow, users will close more deals and therefore, make more money! ProspectNow is a vital tool for their business success in real estate or real estate marketing. Additionally, ProspectNow is trustworthy and easy to do business with and a provider of reliable data.