How To Become a Commercial Real Estate Agent in Canada
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A commercial real estate career can be a lucrative one if you manage to meet the profession's demands. This role allows you to help clients sell and find properties. These clients can pay you significant amounts of money for your help with their commercial real estate transactions. In this article, we discuss how to become a real estate agent, examine a commercial real estate agent's responsibilities, and answer some questions you may have before becoming a commercial real estate agent.
Who is a commercial real estate agent?
A commercial real estate agent helps clients sell, rent, or buy buildings used for business purposes. Commercial real estate agents can find the perfect deal for a client selling the property or link buyers with buildings matching their unique needs. They can use their market connections and networks to satisfy their clients' needs quickly. Clients can pay them a commission for their services.
What does a commercial real estate agent do?
A business real estate agent can perform these duties:
Search for listings and potential clients in a specific area
Pursue new clients via networking and cold-calling
Research an area's population, environmental studies, and demographics to give insights to clients
Track and analyze the real estate market for property valuations and trends
Coordinate and attend property inspections
Conduct marketing campaigns to promote properties
Draft essential documents required during commercial real estate transactions
Negotiate and finalize contracts between buyers or renters and property owners
How to become a commercial real estate agent
Follow these steps to become a commercial real estate agent:
1. Satisfy the academic requirements
You require at least a high school diploma to be a commercial real estate agent. Pre-licensing coursework may also be necessary, depending on your provincial real estate association. A degree or diploma in real estate may be optional, but it's advisable to get one. Prospective employers and clients may consider your post-secondary education as an asset. The education may also cover some areas overlooked by the pre-licensing coursework, such as how to earn a commercial real estate agent salary and marketing.
2. Get the necessary licences
Provincial real estate associations may require commercial real estate brokers to have a valid realtor's licence before selling real estate in their territories. You can get these licences by taking select courses and passing the provincial real estate association's exam.
You may also need to meet these criteria (depending on the area in which you are a commercial real estate broker):
Have a high school diploma
Be at least eighteen years old
Pass a criminal record check
Related: What Is a Background Check?
3. Find employment
Pursue job opportunities to find employment. You can work with a brokerage firm that handles both commercial and residential real estate transactions. You can start as a residential real estate agent before becoming a commercial real estate agent. This approach can be helpful, as you may gain essential industry experience and build your professional network and skills before joining the commercial real estate market. You may also start your career at an organization that focuses on commercial real estate only. These companies can offer salaried training initiatives for employees.
4. Join professional associations
Some companies may ask you to join provincial real estate associations before hiring you. You may also join (commercial) real estate associations to build your network, show your credibility, and enjoy their professional benefits if your organization considers joining one optional. The associations can offer training programs, access to real estate resources, and continuing education opportunities.
5. Choose a specialization
You can specialize in a category of commercial real estate as you build your career. Consider the various options, such as industrial, office, and retail. You may base your choice on potential financial opportunities or your interests. Specializing in a specific area can differentiate you from other commercial real estate brokers and show your expertise in the category of commercial real estate. You may also target some clients in the field.
Full-time vs. part-time commercial real estate agent
You can choose to be a full-time or part-time commercial real estate agent. Some people prefer this job because they can decide their vacation and work schedules. Although, being your own boss may be challenging. Payment delays, even after closing a deal, can also affect your financial stability. These challenges can be worth considering before becoming a commercial real estate agent. Full-time commercial real estate agents dedicate all their work time and effort to the real estate market. Some people prefer this option as it allows them to prioritize their commercial real estate activities.
Part-time commercial real estate agents follow most patterns and routines, followed by full-time commercial real estate agents. Although, they dedicate less time to the profession. For example, they can undertake a commercial real estate agent's responsibilities with another job or staying home. A part-time commercial real estate agent can struggle to achieve their targets, as they spend less time at work. This option can benefit people who have limited time for the commercial real estate agent job.
Clients pay a commercial real estate agent a commission on a proportion of the transactional value, net of the broker's cut with other deductions and fees. Some companies may also offer small supplemental earnings or allow you to draw against future commissions. A veteran can enjoy lucrative paychecks with every small transaction, as buildings are often worth millions. They can also have a consistent flow of transactions, enabling them to get thousands of dollars in commission every year. Although, they may sacrifice their labour and time to enjoy such success.
A commercial real estate agent can keep a one to five percent fee on all leasing or sales transactions, as dictated by the Federal Competition Bureau (F.C.B.). The brokerage company can get about 35% to 40% of the fee. This amount is payable between a month or two after the commercial real estate deal is complete. Leasing transactions can take a short period to complete, allowing you to earn your commission quickly. Purchase deals can take six months to a year for the parties to sort every issue, such as a sales price, sign the documents, close escrow, and take ownership.
The legal process and due diligence for a commercial property can take longer than residential property. These approaches are necessary because the sum involved is higher. Both parties exercise prudence to ensure the transactions represent value. The commercial real estate agent can analyze the property, current market conditions, zoning regulations, history, and recently closed deals of similar buildings to negotiate well. There are fewer commercial real estate listings. An agent can spend a considerable period finding new prospects, meeting leads, and following them.
Some major corporate players dominate the market segment. A commercial real estate office can be a hectic, high-paced, and stressful environment. Some agents get only a landline and a desk to make their job a success. Lack of privacy and noise are common in most offices. Be resilient to external distractions and influences to succeed. You may also spend little time in the office, as most of your work may involve meeting and chasing leads in person or the buildings involved.
FAQs on commercial real estate brokers
Here are two frequently asked questions about commercial real estate agents:
Does a commercial real estate agent need any skills?
Some qualifications are necessary to succeed, as being a commercial real estate agent involves more than finding and selling commercial buildings. You may persuade clients to buy, lease, or sell commercial property, negotiate terms, engage the parties to identify their needs, and plan for title confirmations to authenticate ownership. You may need excellent communication skills, information and technology knowledge, customer service, and commercial real estate market awareness. Being proactive, aggressive, motivated, and detail-oriented can also be helpful.
Do commercial real estate agents make a lot of money?
Commercial real estate brokers can enjoy their income streams. You can thrive if you are good at your job and prioritize affluent areas, like Toronto, Vancouver and parts of Calgary. If you work in less affluent areas, you may get average earnings. There isn't always a high-income potential, but the money you make can sustain you.
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