In many larger jurisdictions, commercial brokers focus on one asset class such as office, industrial or retail. They do that because they know that to service their clients, it’s necessary to have a high degree of knowledge in one area.
In Saskatchewan, we do not have that luxury. Our population base is simply not large enough to allow a broker to make a reasonable living working in one commercial asset class.
Having first spent 14 years as a residential real estate agent, then four years as a non-competing broker/manager in that sector, and more recently 25 years as a commercial real estate specialist (the last five as managing partner), I have a broad, well-rounded view of this discussion.
When I was a residential agent, I referred my clients who had a commercial need to a commercial agent. I did not trade in commercial real estate. As a commercial broker, I refer clients who have a residential need to a residential advisor, I do not trade in residential real estate.
When our staff or agents buy residential real estate, they are required to use a residential broker.
When I made the transition from residential to commercial, I floundered for about six months. It was only after I decided it was necessary to wipe my mind of all I had learned on the residential side and start absorbing the information that was applicable to commercial only that I started to succeed.
Regardless of the years of experience I may have in a specific sector, unless I’m working day-to-day in either commercial or residential, I am not well-positioned to represent a client properly.
Our real estate world is becoming increasingly complex.
The education provided through the licensing process falls far short of providing the necessary information for an agent to sell or lease commercial real estate.
Our company educates our agents on an ongoing basis, providing relevant industry information as it changes rapidly.
A real estate company which is not focused 100 per cent on the intricacies of commercial real estate is not positioned to provide the ongoing market information, education and direction required to prepare its agents.
How do those agents then advise and negotiate leases and property sales while representing the best interest of their clients?
For all these reasons and many more, an agent should therefore work in one sector only; he or she should not be permitted to trade in the other sector.
Do the math
Much of the challenge exists with the public, which may not be equipped to ask the relevant questions before engaging an agent to represent them. Questions you should ask include:
– Does the firm and the broker you work for specialize in commercial only?
– What percentage of the transactions you facilitate are residential and what percentage are commercial?
– What percentage of those transactions are retail, industrial or office lease or sales?
I am a realist. This issue will not be solved quickly.
Unless we educate the public to ask these questions, things are unlikely to change.