I work part time as a realtor and recently had a family member come to me looking to buy a commercial property for his small business. Since I have only done residential transactions I was curious to see what other agents do in this type of situation. He is a qualified buyer who will end up buying so I would hate to just give the business away. I was curious to see if anyone else was ever in this situation and what they did. I had suggestions ranging from asking an experienced commercial agent to mentor you through the process in exchange for the full commission to splitting the commission by doing the leg work on the deal and having an agent overseeing the transaction. Thank you in advance for any suggestions.
I had this same situation, and my broker explained that if it was purchasing part or all of a business, not the property itself but the name, equipment, etc., then I could not do that. But if it was purchasing the commercial building, then I could represent my family member and my broker would guide when necessary. Unfortunately, my relative had specific parameters and decided not to purchase after all, so I cannot guide you on a completed purchase, just on the initial process.
My broker said the same thing as far as building vs. business. I wouldn’t have an issue with a simple building transaction but this one involves 2 residential properties, a variance, and soil removal. I would not feel comfortable representing a client without full knowledge of these processes. My problem is that there are no commercial agents in my brokerage. My broker sent me a contact for an independent broker and suggested i use him as a mentor and give him the lead. My issue is that I have no deire to get into commercial real estate at this point in my career so would rather either collect a referral or work (show properties, inspections, write contracts) with another agent for a split. I was just curious if anyone has done something similar or if any local commercial agents would be interested.
@Tim Mensch If the property has been identified, just have a real estate attorney draft up the offer. Your initial issue might be in value assessment of the property. CoStar, the commercial MLS, has very advanced analytics and data that helps agents/brokers value different property types. Most commercial listings will not be posted on the MLS, at least they aren't in my area. I would think about partnering up with a commercial broker who has CoStar and experience in the property type.
We do commercial in the DC area, so feel free to reach out with any questions.
Hi @Tim Mensch , most commercial brokers I work with are more than happy to give a referral fee, usually in the 20% range. If you don't have any interest in learning commercial, just hand off the lead and collect your payment. I think the buyer would respect and appreciate your decision, rather than jumping into something you aren't fully confident in.
This could also be an opportunity to work a mutually beneficial relationship with the commercial broker. Find someone you click with, and if he has a client that needs a resi broker in the future, you should be his first phone call.
Thank you for the quick responses. Our local MLS has the commercial listings available but do not give a value assessment for the property. That sounds like a great feature. I would love to see the day where everyone uses the same MLS.
20% sounds like a fair referral fee. I will present this to some local agents and hopefully they will think the same.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.