The typical agent will work in residential real estate, listing homes and specializing in a certain geographic area of town. But there are other options for agents to consider.
- One area is commercial real estate. This is an interesting alternative but it’s not for everyone. Issues to consider are:
- The earnings can be substantially higher because the transactions are much larger. In leasing you get paid upfront on a percentage of the entire amount to be paid over the whole lease term. If it’s a sale or purchase a small deal is $500,000. You easily have deals in the millions.
- These are business decisions and the process can be more appealing for some agents. Some agents are better at this than working with husbands and their wives.
- The hurdles to success are much higher than residential real estate. The transactions are significantly more complicated than residential real estate and require a different skill set. The transactions may be larger but there are also far fewer
- The time frame to build your business is significant. You have to know who the players are and how the game is played. These relationships take time to develop.
- Commercial real estate is so different from residential I sometimes wonder why they are required to get the same license. The financial decisions, real estate issues and legalities concerning a retail lease, or buying a warehouse are not at all similar to the ones involved in buying a new home. The earning potential can be much higher but you need to match the skills that are needed in the field. Within commercial real estate there are a variety of sub-specialties like retail, office, warehouse, multifamily, land development, etc. If you are interested in commercial real estate you should work with a firm that specializes in the area you are interested in.
- Real estate development. This is similar to commercial except these are the companies that are taking the risk and building the real estate. They may also be doing the leasing and need agents to market their properties. Often they will be managing and leasing space for other owners as well. These positions will be very hard to get and you will certainly be starting at the bottom of the ladder. This will be structured more like a job with salary and benefits plus bonus from commissions.
- New home sales. If you work directly with the builder then you don’t need a license but many builders don’t employ their own sales staff and use licensed agents to market their homes. This can be a hard field to break into because of competition and limited opportunities. Most builders will already have these relationships and will be with experienced agents. Typically you aren’t an exclusive agent for their company and you can be working on your own transactions as well. These positions improve your chances of listing re-sales, because you will already have an established relationship with the customer and be known as the neighborhood specialist.
- Condominium specialist. This is closely related to new home sales but with a focus on condos. The condo market is growing and will offer significantly more opportunities for agents. Many developers won’t be large enough to employ a sale staff but hire licensed agents. This will also open the door to future business as the condos turnover in the years ahead. You will be known as the expert for the development and will have a lot of resale business.