Selling Commercial vs Residential Real Estate: What are the Differences?

Tony Gilbert
Realtor® ABR®, The RealFX Group – Washington


When it comes to selling real estate of any kind, there are many universal truths that agents can adhere to. These truths include the old adage of location, location, location, along with the value of politeness, manners, efficiency, and professionalism. Anyone who’s buying a piece of property will likely expect these things, and every agent should strive to offer them. Whether they are selling someone a new home or helping a business owner or investor find the right commercial property, agents who work well with the public, have knowledge of the area, and learn about their clients tend to go much farther.

For agents looking to specialize in residential or commercial real estate, however, there are some important differences to keep in mind. Some of these may play to one’s strengths more than others and may help agents decide which path is better suited for their personality.


Residential Real Estate is a bit More Emotional

When selling residential real estate, an agent has to remember that they’re selling someone a home. Yes, there are buyers who are purchasing homes for investment properties and renting them out. There are also people who fix up houses and flip them. But the majority of the residential real estate buyers an agent will encounter are people who are looking to buy a home they’re going to live in for some time. It might only be a few years or it might be their forever home, but they want someone who listens to their needs and goals, and who understands what “home” really means to them. In residential real estate, customer service is king.


Small Differences Have big Impacts in Residential Real Estate

In residential real estate, there are plenty of options for a person to find a home they like. They may want to pick something small and easy to take care of, or a more grand home they can really grow into. There are choices on both ends of the spectrum, and nearly everything in the middle of those extremes. After zeroing in on the type of home a client would like, small variations between them can make all the difference when it comes time to choose. Agents who are selling residential real estate need to know about the benefits and the features that their buyers want and need in the houses they’re looking for. The more they know about the homes in their market, the easier it is to recommend a particular home based on a buyer’s likes and dislikes when compared with the local offerings.


Commercial Needs go Beyond the Buyer

For agents selling commercial real estate, it’s about more than just the location. It’s also about how easy it is for people to get in and out of that location in some cases. These buildings are going to house businesses, and because of that it’s important for the property to suit the needs of tenants and/or their customers. That may mean the size of the parking lot, whether people coming in or out have to turn across traffic on a busy highway, if the building is handicapped accessible, whether there are renovations needed to fit the buyer’s needs, and much more. Commercial real estate agents must understand the business aspects of these purchases. Not all businesses are the same, and their real estate needs will vary accordingly.


There are More Variables in Commercial Real Estate

Some people who buy commercial property do so as a location for their own business, but many do it with the idea that they will own the building and will rent it out to tenants. That means different needs, and because of that a commercial agent has to anticipate and understand both of those needs. How the buyer intends to use the property is a very important question, and one of the first ones the agent should ask before showing commercial properties to the buyer. In short, commercial real estate agents need to be intuitive, knowledgeable of their products, and adaptable because business needs are often more complex.


A Real Estate Agent’s Knowledge of the Product Matters

Product knowledge is important in any job, and real estate is no exception to that rule. When it comes to residential real estate, agents need to know about the homes in their area and the latest trends and styles. Commercial real estate is different, but it’s not better or worse. It’s a personal preference, as some real estate agents like selling homes and others really prefer to work with businesses. No matter which option an agent chooses – and there are some that handle both – having strong knowledge of what’s being sold can help an agent further their career and make it much stronger than it would otherwise be.

For agents that aren’t sure which route they want to take, or whether they would like selling commercial or residential real estate better, shadowing a current agent and asking plenty of questions can help solidify their ideas on which would be the best path for their career.