Commercial Real Estate Agents Explained | Emerald Business Board

Commercial Real Estate Agents Explained

June 25, 2016 Facebook Twitter LinkedIn Google+ Business Terms,Selling Your Business,Buying Your Business

Canadian Real Estate

“Understanding Commercial Real Estate Agents”

On paper, a commercial real estate broker (or agent) is a person that helps sellers in selling their property. They help in formulating the final asking price, the scope of advertising and marketing of the property. The work load includes property listing in listing services, and doing open houses for buyers-to be to visit.

On the other side of the table, the agents help the prospective buyer in the selection of properties to buy, and doing such duties as visits and property inspections (together with the buyer) and other related side work.

Working mainly in the vendor (seller) side, they advise their clients on the current conditions of the market, the prevailing price trends, status of mortgages, and advise on other requirements in legal matters and related areas. They are the ones who prepare the sales agreements that will be approved by both the buyer and the seller to complete the transaction.

Finally, the seller will then pay his commission for the things he accomplished in closing a sale.

The job

A commercial real estate agent (or broker) does the selling for most income-producing properties. These commercial properties include such structures as apartments, office buildings, stores, warehouses and can include huge properties as industrial parks and shopping centers.

The job of a commercial real estate agent has some big differences with that of a residential real estate agent, although the basic mechanics are similar (both are selling agents). Agents sometimes work only by themselves, or under a real estate firm or for other commercial brokers. The payment for brokers is usually through commission basis.

Generally, leasing or selling commercial property has a longer time, and real estate agents should give enough analytical data and financial information. Commercial brokers must have a deep knowledge of the current state of the property market.

These can include in-depth information on local economic trends, substantial analytical data, and the current regulations on income tax and arrangements on purchasing. Armed with such information, they usually give their buyer-client a better edge in their investment, including better arrangements with regards to financing.

(On the other side of the fence, the agent representing the seller can prepare his client with better information to be able to competitively price their property better and not out of the market.)

commercial real estate

Tasks and responsibilities

On a given regular day, the commercial real estate agent has several things to do. This includes doing cold calls to managers, business owners and colleagues. The purpose is mainly to find new prospects and prospective properties.

This is also the networking part that he does not just to collect new information and statistics, but also (mostly) to re-connect with the right people.

On the side, agents do research and analysis on current lease payments for some office in his area. They do their techniques in statistical analysis (break-even analysis included) for their clients. This can help in determining further the margins of safety in their current or oncoming transactions.

The other basic responsibilities for the commercial real estate agent include more research and discussions on better maintenance costs, and perhaps, renovations. Their networking activities with local businesses are all grounded in their basic needs.

The need is coming up with better negotiation terms for their clients, the buyers or for the sellers (whoever they are currently working for). All these, of course, include finding ways of better financing arrangements and better facilitation especially in the final transactions for their respective clients.


Commercial real estate agents must first finish the compulsory secondary school education. A college education and other specialty courses are extra aids in rounding his personality and mind to take on the brokerage business.

Next, our agent needs to complete a Real Estate Training course. This is another compulsory requirement for everyone who wants to join the brokerage industry. The final requirement is getting a Territorial or Provincial Licensure in the territory or province or place of his employment.

In normal circumstances, commercial real estate agents work and get paid on commission basis. He can work on his own after getting his license, following regulations in accordance to his province of employment (if he works under a real estate brokerage firm).

This license is also an important requirement should he aim and apply for the higher-ranking job of a manager in the brokerage firm (either his own, or some other offices).


A commercial real estate agent is classified 6232 by the Canadian National Occupation Code (NOC). The prospects for real-estate agent employment in Canada are good. The data have indicated that in the very near future, there might be some job shortage in this profession.

There are several titles for the job and their exact duties in the industry and they all vary. Some of the titles for the job include “real estate agent”, “real estate broker”,” commercial real estate salesperson” and residential real estate agent.

As per the latest numbers, the annual salary of a full-time agent on the job is between $40,000 and $65,000. The hourly rate is $26.29 (Winnipeg, Manitoba), the highest. The lowest average wage is $19.00 every hour.

Here’s a sample transaction. An agent (and maybe a co-broker firm) was able to lease 7,500 square feet of space at 12/square foot for 3 years. The agent’s firm is paid 3% and the agent takes home 65%. In real-world terms, the commission of the agent is $5,265.00. (Selling a whole shopping mall for about $50,000 can give a winning commission for the agent.)

The market

The current state of the Canadian real estate markets today has been in upbeat mood and exhibiting a strong position and is buoyant. There is growth after having been moderated in the last few years. This had been aided by the stabilizing domestic factors to offset the global uncertainty.

Canada had been strong in keeping a sound government, healthy banking system kept well-regulated, and some other factors that include steady immigration pace and the country’s natural rich natural resources.

Globally, Canada remains one of the prized locations highly desired by investors. The reasons are varied, foremost of which is that the country had been trouble-resistant unlike other countries.

This is due mostly to its adherence to transparency, a robust and healthy grip on property rights and its low volatility. In the domestic front, Canada has cultivated a favorable environment for borrowing, plus its own healthy institution of cash reserves.


In the real estate industry, marketing plays such an important role in having the property that was for sale get sold fast and cleanly, and for a price that is nearest the ideal for both seller and buyer. The marketing relies heavily on the efforts of the assigned agent.

The seller is the one who retains the services of the commercial real estate (and pays for his services) who acts as the listing agent. The listing is vital in helping the market sell the property. The duty of the listing agent is getting the highest price for the property on behalf of the seller.

On the other side, the buyer can also retain the services of a commercial real estate agent (now aligned as a buyer’s agent). This retainer agreement clearly defines the duties of the agent to the buyer.


There are two types of costs in the negotiations of buying and selling commercial properties. (Regular real estate agents sell and leases residential structures that usually produce no income on its own. This is another difference between the types of real estate agents.)

From the seller, the costs would typically cover several items. They include fees for the listing agent, and the legal costs covering the charges by the lawyers of the seller. Lease transactions mandate that the landlord pay for the legal costs himself in addition to paying the listing agent’s brokerage commissions.

Costs that need to be paid by the buyer include the commissions that are to be paid to the agent retained by the buyer. Included, too, are the charges of legal costs from the lawyers of the buyer.

There are other costs as well that need to be paid. Aside from Due Diligence, the other fees include the Mortgage Assumption fee. This becomes part of the costs should a mortgage is assumed during the negotiations and becomes part of the transaction.

There are also the standard Registration fees and the corresponding taxes due to transfers. If applicable, there are fees to be paid under the Competition Act.

Due Diligence

One important phase in buy-and-sell transactions of commercial properties that needs to be paid due to the amount of efforts is Due Diligence.

On the seller’s side, they want to sell their properties at the highest price possible while brokers are interested in closing the deal. On buyer’s part, they also need to protect themselves with correct information or be holding an empty bag.

In the micro level of the action, you check the market to ensure projected prices are correct or nearest to the actual. Going macro, you need to look (and analyze) prevailing macro trends around. You check on the comparable buildings and check what the other investors paid.

The costs on Due Diligence are for consultants which did and prepared the various reports on the condition of the commercial structure under scrutiny. The other payables running under the same heading include assessments on the environment, the appraisals on valuations and the surveys done on the real estate property.

On occasions, there are also inquiries under Due Diligence that were made to several bodies, either statutory or governmental. Except on highly-specialized work, most of the job done under Due Diligence are prepared and made by commercial real estate agents.

A commercial real estate agent’s take-home pay is sometimes more than the standard locked-in salaries of workers in the other professions.

Commercial Real Estate Agents Explained
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Commercial Real Estate Agents Explained
What is a commercial real estate broker and what do they do? We answer these questions and more...
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Emerald Business Board
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