Several years ago I was talking to a friend in Austin and mentioned that I had sold my house in Dallas as a For Sale By Owner (FSBO). He was surprised that it was possible to buy or sell a house without a residential real estate agent. I was shocked that he didn't know he could trade real estate without a broker - however ill-advised that might be.
Brokers can only negotiate the sale or purchase of a house, right? Aren't they all the same since they have access to the MLS? Even though I've been in the commercial real estate business for over 28 years now, these misconceptions surprise me. I don't have access to the MLS and I've almost always hired a residential agent when buying or selling the homes I've lived in.
Real estate brokerage has evolved in the last 30 years to become a highly specialized industry. Many brokers have essentially become real estate advisors providing financial analysis, demographic studies, market analysis, site selection research, business planning, portfolio analysis and management, marketing plans, and even construction management in some cases. This is more the case for commercial brokers, but residential brokers have also become specialized to some extent.
For example, residential agents usually specialize based on geography first and then by the price range of the house, type of house (single-family, high-rise condos, etc.), type of client (owner-occupant or investor, buyer or seller), and type of service (sales or property management). Many will be a combination of these specialties - seller agent for high-rise, luxury condos in the Uptown area of Dallas.
Commercial brokerage is far more specialized than residential. Agents will often specialize based on 4 factors - 1) geography (Dallas, Plano, Frisco, Richardson and/or Addison), 2) product type (office, industrial, retail, hospitality, or multifamily), 3) client type (seller or buyer, landlord or tenant), and 4) service provided (investment sales, tenant rep, project leasing, property management).
These criteria can be cumulative, of course. For example, I primarily focus on north Dallas county and south Collin county, in office and industrial buildings, negotiating for the tenant, as an exclusive tenant rep. So I don't represent landlords when they have property to lease or manager because that would be a conflict of interest with my clients.
The degree of specialization is often a function of the size of the market. For example, a commercial broker in Amarillo may represent both owners and users of several product types because there isn't enough business in any one specialty to make a living. In Dallas, however, specialization is the norm because it's in the best interest of clients and it's a large enough market to support broker specialists.
Rarely do you see brokers cross the residential/commercial line individually. Many national residential brokerage companies are trying to set up commercial divisions with mixed success.
The good news is that owners and users of real estate have an incredible array of options when hiring a broker to represent their interests. The greater the specialization, the better the quality of service in most cases. It's important to find an agent who specializes in the geography, product type, client type and service that fits your assignment. The agent must be of impeccable integrity, be willing to listen to your needs, and have the time to focus on your assignment. Don't be afraid to use one broker to help your company lease space, another to find a house to buy, and yet a third to handle your hotel investments. Ask for referrals even from a broker you have used.
Oh, and by the way, there is no law saying you have to use an agent at all. But using a specialist will usually save you time, money and reduce your risk considerably.
Comments(1)