Real Estate

What is a Commercial Real Estate Broker, and How Do They Work?

October 20, 2021

If you're looking to buy or sell a commercial property, it's important that you find a qualified Commercial Real Estate Broker. A broker is simply an intermediary who works in the real estate industry and specializes in helping match up potential buyers and sellers with the type of properties they are looking for. They can be used for residential properties as well, but commercial brokers will typically have more experience in this area. A licensed broker will charge a commission from either the listing agent or seller's agent depending on what side he or she represents in the transaction, which is usually negotiated before any work begins on the sale. In most cases, these commissions run anywhere from 2% to 6%. This article will discuss how brokers work and figure out if they are suitable for your business.

What Are the Differences Between a Residential and Commercial real estate agent?

In order to be a residential brokerage agent, you must have successfully completed the required qualifying courses for this profession, which include general real estate law. In addition, most State licensing boards require that brokers pass a written exam or series of exams in order to get their license. While studying for this test is not always necessary, it can be helpful for those who know that this may be a difficult exam.

In addition to basic education requirements, brokers must have several years of related work experience in order to get a State license. In some cases, brokers who have worked with a broker with a track record of closing deals might also qualify without meeting the standard experience requirement.

While there are no specific education requirements for commercial real estate agents, they must still complete several years of work in related fields before applying to State licensing boards. This means that it is typically best for someone who wants to become a commercial broker to get their license first before starting on their own.

Commercial real estate brokerage agents must be able to work with various people and conduct their market research and search for properties to meet their client's needs. It is also common for those who want to become brokers in this field to take additional training courses, such as those that concern commercial real estate law or finance.

Commercial real estate brokerage agents may also need to draw up contracts, make presentations and work with architects, engineers, and investors. While this career does not always require many of the skills that real estate business appraisers must-have, they still consider it an essential part of their profession.

Features That Brokers Look Out For In Commercial Property For Their Clients

Brokers look out for a variety of details in a commercial property for their clients. They will typically factor in the following:

The location and size of a property

Brokers will not only look out for properties that meet your basic needs, but they'll also try to find ones with desirable features, such as being close to public transportation or having an aesthetically pleasing design.

State laws

State laws might also affect what brokers will look for, as some states require that a licensed broker warn potential buyers about any possible environmental hazards at the property.

Proximity to public transportation and other amenities

Brokers will also try to find properties in areas with a lot of activity and foot traffic. This keeps your company visible and helps attract potential customers and tenants.

Parking space for your customers and tenants

Real estate transactions can be costly. Brokers will look for properties that offer parking space, which keeps the monthly expenses at a minimum.

Access to highways or waterways for easy shipping and receiving

If your company transports goods or supplies to other businesses, brokers will look for properties with easy access to these transportation facilities. This makes it quick and simple to get goods where they need to go.

Number of floors and leasable space in a property

Brokers will also factor in the number of floors a building has and how much leasable space is available. This helps you decide how many employees and customers the building can accommodate.

Extra room to enable expansion and growth

If your company is doing well and continues to grow, you'll need to be able to expand into a new commercial property. Brokers look for properties that have an extra room or can easily be renovated/expanded in the future so your company can stay competitive and growing.

Ways That Commercial Real Estate Professionals Work

Commercial real estate agents are tasked to work with both the landlords and tenants or, in some cases, both. They work with landlords to find the best tenants and work with tenants to find the best location.

For landlords, brokers will identify potential tenants that meet their criteria and provide them with a list of available properties for rent that fit these requirements. These agents also referred to as the seller's agent, often have the connections necessary to source potential tenants from big companies down to individual renters on a case-by-case basis. It is not uncommon for a commercial real estate firm through its listing agents to assist with taking out leases, especially if the client is a smaller business that doesn't have the time or resources to go through all these transactions.

For tenants, brokers will often actively search for properties that meet their clients' needs and/or preferences. This includes locations, amenities, building layout, etc. They may also assist with negotiating the best possible deal on a new lease for the tenant with the seller’s agent.

In some cases, certain States allow the broker to work with both the landlord and tenant in the real estate transactions. Brokers in these States will work with both parties to negotiate the most favorable terms for each side.

Ways of Becoming a Commercial real estate agent

The process of becoming a commercial real estate agent varies by State. There are, however, some qualifications that all brokers need to meet in order to be licensed.

Gain a real estate license

This is the most basic requirement for being a commercial real estate agent. It can be sourced from the national association of realtors. Most states require that you either have a Real Estate License or be working towards getting one before you can become an associate broker or be part of real estate salespersons. If you want to become an industrial or commercial real estate agent, then a college degree in business, marketing, finance, economics, or a related subject is required. However, it is essential to note that a degree is not necessary for real estate professionals.


While some states do not require any previous work experience for this profession, many States require at least three years of industry-specific work experience as an associate broker or as part of the real estate salespersons. This can be related to any real estate, but it can also be any other work experience deemed necessary for this profession by the State. This requirement often applies to a combination of working with a licensed real estate agent.


In addition to having worked in certain fields for several years, brokers may need to have completed specific real estate courses as well. These courses often have names such as "Introduction to Commercial Real Estate," "Commercial Property Appraisal," and "Real Estate Finance," among others. As a result, it may be beneficial for aspiring brokers to get a bachelor's degree in business or a related field, in addition to their broker's license.

Getting a commercial broker's license

In order to work as a licensed real estate agent and get the national association of realtors license, you must typically pass a broker exam or series of exams administered by your State. As with most real estate licenses, the requirements and format of these broker exams may vary by State. Some brokers opt for real estate courses that can help them learn about specific aspects of commercial real estate and potentially fill in any educational gaps that they may have. However, these courses are not required; you can still apply for a broker's license with only the basic requirements.

Salary of a commercial real estate broker

The salary of a commercial and licensed real estate broker depends on many factors. These include:


As with any other career, commercial and licensed real estate brokers usually make more money as they gain experience. Typically, a new broker makes around $40,000 per year after their first three years in the field. After five to ten years of experience under their belt, most earn between $60,000 and $110,000 each year.


Commercial brokers also tend to make more money in different industries. For example, a broker that works mostly with retail spaces usually takes less than one that specializes in office space rentals. However, the actual difference is generally minimal and may only be around $5,000 between each of their salaries.


The salary of a commercial real estate broker also varies depending on the city. For instance, brokers in New York City make an average of $94,000 per year, while brokers in Detroit make around $49,000 each year.

Commercial real estate is an essential part of any country's economy. It can help to determine how quickly companies grow and what goods are available for citizens to purchase. As such, it is important for brokers to be able to work independently in order to determine their own schedules and make enough money to support themselves.

Advantages of hiring a commercial real estate broker

Hiring a commercial real estate broker has many benefits for both the buyer and seller. First, they can guide potential investors through all of the steps of each transaction to make it go smoothly. This includes determining what types of investments are available, how much money can be made with certain deals, various ways to finance transactions, etc.

Another benefit of hiring a broker to work on your behalf is that they are able to show you several properties. This may include taking you to see the property in person, sending pictures and videos of the building, or anything else necessary in order for you to make an informed decision.

Disadvantages of hiring a commercial real estate broker

There are many benefits to hiring a commercial real estate agent. However, there are also some disadvantages that you should be aware of when hiring a real estate agent. For example, they will often charge fees for their services, including a percentage of the commissions made on the deal or any other costs involved with representing you. Also, since they can control which properties appear in front of you, the real estate agent may attempt to pressure you into making a purchase that is not in your best interest.

How to find the right commercial real estate broker

Finding the right commercial real estate broker can sometimes seem like a complex process. However, there are some valuable strategies that you can use to help narrow down your options and make this process easier.

First, you should know what type of buildings are available in your area. This can help you narrow down your search to only those that will meet your needs and allow you to save time by not having to visit buildings that are not a match. Also, determine the exact size that you need. For example, if it is a retail space that you need, it is important to know exactly how many square feet you require and whether or not the surrounding area will meet your needs.

Once you have decided on a size and type of building, one of the best things that you can do is talk to people in different industries. For example, if you are looking for retail space, then you should ask real estate brokers, commercial property owners, and retailers what types of buildings are available in your area. This can help give you a good idea of what is currently on the market and its costs.

Once you have this information, list out all of the critical things you need from the building to determine whether or not each one is a good fit for you. For example, do you need to be near a busy street? Are there certain amenities that you require, such as an outdoor space or on-site management staff? Once you have created this list, rank each property according to the importance of its features and then start looking at brokers that specialize in these types of properties.

Once you have a list of potential commercial brokers that can help you, then it is time to start narrowing down your options by looking at the pros and cons for each one. For example, some may have a long track record of successful transactions, while others may be less experienced but have low fees. As such, please do some research on each property to determine which one would be the best fit for your needs.

Once you have found a commercial real estate broker that meets your needs, interview them and ask every question that you can think of. This will give you a good idea of whether or not they will be able to provide the services you require and if they are familiar with the specific type of properties you are looking for.

If you need further information on finding a commercial real estate broker, then be sure to consult your attorney. They will have valuable advice and experience working with these professionals and can give you some more insight into what to ask during the interview process.

To sum it up, there are many benefits to hiring a commercial real estate broker when looking for the right buildings. However, you should be aware of some disadvantages that can come with these professionals before choosing one. The real estate industry and the real estate business can be volatile. For example, they may charge fees for their services and have control over which properties show up in front of you. Therefore, it is important to know how to find the right commercial real estate agent and what to ask during the interview process to narrow down your options. This will help you make a more informed decision and choose the best building for your needs.


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