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The Business of Being a Commercial Real Estate Agent
Working in commercial real estate is quite different from helping home buyers and sellers—you’re working with business owners and investors with a very different inventory.
A commercial transaction might deal with multi-family, mixed-use, retail, or office space. Therefore, successful commercial real estate agents must know about sales and leasing in a broad array of property types. There are different kinds of tenant negotiations that occur, and different types of marketing strategies. And a transaction could be for an owner occupied property or as a commercial real estate investment, adding additional factors to the transaction.
What do investors, buyers and tenants want from a commercial real estate professional
First off, commercial is a specialty, so it’s best that an agent gain experience and knowledge in this specific sector of the real estate field. Know (or learn) how to deal with commercial transactions—there are no uniform contracts or cookie cutter leases. That means sharpening your negotiation skills as well as understanding the leasing or commercial buying process.
Of course, just as with residential sales professionals, being proactive is important. Aside from canvassing the local market for properties and leads, research is key to commercial transactions.
- Use your office’s systems and tools to research market rates for rentals
- Become conversant in investment packages
- Gain a full understanding of the different areas in your market. Do properties in certain areas attract certain kinds of businesses? Do the listing prices make sense for sale properties?
- Can you provide a detailed and accurate financial analysis for commercial investors?
Aside from research, developing good relationships with area business owners can help create strong database and referral network. When that investor calls the office looking for help finding the right property, you’ll not only have the listings services as a resource, you’ll have local people to contact and potential space to visit because you’ve done your homework.
Speaking of referrals—remember that commercial real estate transactions often involve build outs and other improvements as part of the lease negotiations. Therefore, good power partners are architects, general contractors, and others involved in lease improvements.
More complicated investment deals may require partnering with others to make a successful transaction, so it’s important to know the players in your area or your office to create a winning team.
If you are working with tenants, it’s important that you show them you understand their businesses and that you are showing them space that makes sense for their needs. Whether it’s a restaurant, retailer, healthcare facility or law practice, every client has different needs in terms of square footage, utilities, parking and leasehold improvements.
When working with building owners, these clients want to know that you have a good performance record when it comes to finding strong tenants or solid buyers; your experience will speak for itself. They will also count on you to represent their interests to potential buyers or tenants, and that you can negotiate a strong deal on their behalf. Like the buyer or tenant, the seller or landlord will want to know that you have his/her best interests in mind throughout the transaction.
From any side of the transaction, building trust builds relationships that will in turn build business.
Build your book of business at Century 21 Cedarcrest Realty
Our office is growing—and we’re always looking for savvy commercial real estate agents to join our team. When you join our northern New Jersey office, you become part of one of the country’s most well-respected real estate organizations, with business-building tools and apps designed for commercial real estate agents. You can take advantage of commercial investment training that will position you for a broader range of transactions. Plus, you’ll benefit from our ongoing in-office training and development for agents at all stages of their careers—an important way we support our team, and why Century 21 Cedarcrest Realty consistently wins industry awards for sales volume and customer service—and accolades and awards from consumers as well.
Interested in learning more? Contact Susan Mazzetta at (973) 228-1050, ext. 126 for a confidential interview.
Are you an Experienced NJ Real Estate Sales Professional with a Career that’s Stuck in Neutral?
Experienced real estate agents know that a career in real estate has many rewards. To a large extent, you make your own hours and the earning potential is high—especially when you’ve nurtured great leads and have closed many successful transactions with happy customers.
However, as with many other careers, sometimes you need to make a change. Over time, motivation can lag and that spark can start to sputter when you’ve been in the same office for a very long time.
If you’re feeling like your real estate sales career has gotten stagnant, it might be time to change offices. And, if you’re working in northern New Jersey on residential sales and rentals, Century 21 Cedarcrest Realty in Caldwell, NJ has a place for you.
Our office is all about excitement and opportunity, working in an upscale market in northern New Jersey. In fact, Century 21 Cedarcrest Realty is a designated Fine Homes & Estates office; wouldn’t like a piece of that action?
Five great reasons to join Century 21 Cedarcrest Realty
- As one of our agents, you’ll be part of the vast Century 21 network, with opportunities to work with buyers and sellers from just about anywhere across the country—and around the world.
- We’re all about career development, and provide ongoing training in our own training center. Century 21 Cedarcrest Realty offers weekly training classes and provides guidance whenever you need it to help you keep your sales and marketing skills sharp and your customer relationships positive.
- No-fee leads – unlike other offices, Century 21 Cedarcrest Realty covers the cost of the lead management system to help maximize your earnings.
- Senior management that’s there and that cares. We’re not behind closed doors—we’re available every day for hands-on interactions with our sales associates, always ready to help you build your book of business.
Come rejuvenate your real estate career at Century 21 Cedarcrest Realty. Contact Susan Mazzetta at (973) 225-1050, ext. 126 for a confidential conversation about opportunities for seasoned real estate sales associates … and a future with Century 21 Cedarcrest Realty.
2016 Real Estate Market
Home prices are moving up moderately this year, but not to the point of discouraging buyers from a first or second home purchase. In fact, the moderate value increase is – in part – due to a supply vs. demand imbalance in many cities across the United States. With new construction at a 50-year low, there are currently more prospective buyers in the market than there are sellers of existing homes.
Interest Rates and Income Growth
Some of the demand is due to the prospect of a raise to interest rates in the future. Many looking to lock in at today’s lower rates are not waiting for those changes, even though it is a sign of a growing economic stability. Low to moderate income growth for those in the middle class also is impacting the supply, as many who were able to hold onto their homes amid the financial crisis nearly a decade ago are nervous to sell or are still recovering their equity. Yet unable to use equity to perhaps buy above their original starter home, many are sitting tight on their current homes. These factors have created a somewhat even and steady market, with it leaning slightly to the advantage of the seller.
The Rental Cost Impact on the Market
Rental prices have increased, with the result having a multispectral effect on real estate. On one hand, the increases in rental prices are a nudge to the renter to take the necessary steps to become a buyer. On the other, it is often more difficult for a prospective buyer to save for a down payment when more of his or her expendable income is going towards maintaining the rent. At the same time, it is a boon for real estate investors and those looking to purchase a second home to rent, rather than sell, the first.
The 2016 market certainly isn’t the gloom and doom prophesied by some. While homeownership is still at its lowest in 50 years and new development has also slowed, values are growing and sellers are finding that buyers are making smart, competitive bids on property. These positive trends are expected to continue as the average wage income increases over the next few years.
What is Real Estate Leverage?
What is Real Estate Leverage?
When it comes to real estate, finance, and investing, the language used can be a bit confusing and overwhelming. Today we want to take a closer look at real estate leverage and what it means to you, as a buyer and investor.
What is Leverage?
Leverage, by definition, is when you use borrowed money (or capital) or some other financial tool to increase the return you receive on a particular investment. It’s not an uncommon at all. As a matter of fact, most people purchasing homes with mortgages are using leverage.
Take a closer look at the example in this Investopedia article and you’ll see how it works. The example provided is that you are putting 20% of your own money, or $100,000, down as a deposit on a $500,000 asset or home. The other 80% of the purchase price is borrowed money. If the value of the property appreciates 5% over the course of a year, the net worth of the borrower, as the owner of the property, is now $525,000.
If that same borrower had said, “I only have $100,000 and I don’t want to borrow any money,” and thus purchased a $100,000 home outright, that same 5% appreciation would only be worth $5,000 instead of $25,000.
So if an individual is in a position to borrow, the end return on the investment stands to be much higher.
Accessing Leverage
It takes money to make money, and that is especially true when it comes to real estate. While a mortgage company is the most traditional route, many investors will seek private capital or other means of investment. No matter what you choose, you’ll want to make sure you understand the numbers and negotiate the least amount of interest possible – something that will also help you to maximize your ROI.
There are Drawbacks
There are, of course, drawbacks. You need to have a strong understanding of the home you’re buying, the real estate market in general, and the area in which you are purchasing. While in the scenario above the individual’s net worth was increased by $25,000, a simple deflation in the value of the home could result in a negative impact and a decrease in the net worth.
Talk to your financial advisor or lawyer if you need help understanding your own financial position and whether or not leveraging the money you have to purchase a higher valued property is right for you. Once you’re ready, your real estate agent will be happy to help you find a property that fits the mold.
That’s Not Fair! How to Determine a Realistic Asking Price for Your Home
That’s Not Fair! How to Determine a Realistic Asking Price for Your Home
Determining the asking price for a home has to be one of the most difficult parts of the selling process. You’ve spent weeks, maybe months, preparing your home for sale – making repairs and upgrades – and you want to get the best price possible. The asking price of any home is influenced by a number of factors, though, and many are completely out of your control.
Do Your Homework
There are a lot of websites you can use to estimate what your home’s sale price may be. Zestimate (from Zillow) and dozens of others will assess the neighborhood, age of the home, size, and other factors to give you a figure to start with. A lot of these tools won’t take upgrades you have made to the home into account, so you may need to make some adjustments.
Make Necessary Adjustments
Don’t get your hopes up if you think the price you’ve come up with is really good compared to the homes that have sold recently in your area. You really want to be within 10% of the most recent sales nearby to be considered in the correct ballpark; and that’s still not necessarily going to be the best price for your home.
A few things you’re going to need to consider include supply and demand, or how many homes are available for sale in your area. The more there is to see, the more competitive your price will need to be. If interest rates are trending high, you may find a smaller pool of potential buyers, so you’ll need to appeal to them. The season even makes a difference. People love to move in the spring, so you may get a higher asking price; but in the winter? Forget it. You’ll either find a buyer who is desperate or wait until spring rolls around again unless you adjust your price.
Talk to Your Real Estate Agent
One of your agent’s primary jobs is to help you set a realistic price point for your home. The financial market, the housing market, and the mindset of the buyer are all things that need to be taken into consideration. Your real estate agent will do her best to help you to set a fair asking price that will move you quickly towards a final sale.
