The world is filled with numerous myths such as taking seven years to digest swallowed gum, we only use 10% of our brain, and of course we can’t forget Big Foot and the Loch Ness monster. These examples are pretty far-fetched, but myths in commercial real estate can be much more difficult to decipher. Here are three of the most common myths that many people believe to be true.
Commercial real estate agents are more expensive than residential real estate agents.
There is no standard or set commission rate for commercial real estate transactions. Contrary to popular belief, all commissions can be negotiated between the property owner and their agent. I set my commission based on the level of work that will be needed to get the most value for my client.
All real estate agents are the same.
Like many other industries, real estate benefits from agents who set a clear focus on a single area of expertise. The benefit to having a commercial real estate agent represent you is their knowledge of the industry. While a residential agent will know the best neighborhoods and school districts, a commercial agent has the knowledge to determine how owning a property or leasing a space can affect a business’ bottom line. Here are some things I can help you with when participating in a commercial real estate transaction:
- Evaluate how much space you need (or don’t need) and how it will give you the best return on your investment.
- Represent you as an experienced negotiator when it comes to topics, such as cap rates, comparative lease rates and terms, and concession and rent abatement provided by landlords
- Advise you (as a property owner) on whether it would be more beneficial to sell or lease, given current market conditions
Commercial real estate agents are only interested in mega-corporate clients or big deals.
As a commercial real estate agent, I am interested in helping all parties in a real estate transaction find a successful solution for their business, no matter the size or scope. More often than not, I represent a single property owner who does not have the time to manage their commercial space or a small local investor who needs help selling or leasing their property. I consider each opportunity on their individual merits and how I can add value to the transaction.