TIPS FROM A COMMERCIAL AGENT

by Melanie Robitaille Sr. Staff Writer & Graphic Designer

Commercial markets across North America may still be recovering from a shift over the last several years, but for as hard as professionals transacting in that arena have had it, aspects of their business that have never changed are buyer representation and compensation, two issues that have turned the tables and rocked the residential world across the continent throughout 2024.

Seeing this, I sat down for an interview with top commercial agent and Certified Commercial Investment Member (CCIM), Timothy Churchwell with EXIT Realty Central in Norfolk, VA to discuss these two issues and how differently they’ve been dealt with on either side of the industry.

“Buyer’s agency is not dead,” he stated very matter-of-factly. “It just means you have to show them the value of what you're doing. And the same thing goes on the listing side too. A lot of agents don't know how to do that though. Now you have to share the stuff you do; show your value and why people need you.”

The fact is, he has become so good at doing this himself that a large part of his commercial business is consulting these days, and handling things like feasibility analyses or making go or no-go decisions on property portfolios being brought to him.

“I can do a restaurant market analysis and tell you how much money people spend in a certain demographic. Say you want to open a fried chicken restaurant. I can tell you how much money the people spent on fried chicken in the last year versus how much money they spent within that geography and do a gap analysis to tell you whether the market is saturated for fried chicken in that location,” he said. But doing this type of thing is just par for the course for him and other commercial agents, and so is talking compensation he says.

IT'S TIME RESIDENTIAL AGENTS TOOK A FEW PAGES FROM THE COMMERCIAL BOOKS AND HELD THEMSELVES TO A HIGHER STANDARD.

Tim, as most people know him, is teaching a course on value these days. Being that his origins are rooted in residential real estate but he’s also the 2024 Regional VP for CCIM and sits on their 2024 Global Board of Directors, he’s known both sides of the real estate industry saying, “I didn't just leap into commercial as much as I wanted to. I didn't even know what I didn't know, so I couldn't. I had to get the education to find out what I was doing.”

In his opinion, the use of a Buyer’s Representation Agreement (BRA) is something agents should’ve always been doing, however not every state mandated the practice, that is until now. Recent National Association of REALTOR® (NAR) changes took effect in August regarding buyer’s agency and compensation which has shaken up residential real estate and caused many a hot debate since. And while some may be new to these practices, he doesn’t think agents should be fearful of them. In fact, Tim believes doing them will only strengthen the integrity of the entire industry.

“This isn’t a big deal,” he explained. “If anything, it's actually kind of positive because what it's going to do is get rid of the agents out there that expect to get paid for holding open a door.” But these aren’t the only other attributes to commercial real estate that residential agents and offices can learn from, there’s also:

WE'VE ALWAYS NEGOTIATED OUR FEES, PERIOD. I ALWAYS EXPLAIN TO MY CLIENTS THE FEE, AND THAT SOME OUT THERE OFFER IT STRAIGHT UP WHILE OTHERS DON'T, AND IF THE SELLER DOESN'T PAY, THEY HAVE TO PAY ME.

ENTRY REQUIREMENTS & EDUCATION

With steep educational and entry criteria, commercial agents going through for their CCIM have to build a portfolio of some 200 postgraduate-level hours, and while there are three different ways to fast-track membership, most opt for completing $10 million in transactions and at least 10 deals. Only when your portfolio passes are you green-lit to take the comprehensive exam, which only happens twice a year in the U.S.

APPRENTICESHIP & CAMARADERIE

During the portfolio-building process, agents like Tim can refer commercial transactions to other CCIM members, because they’re known as (and pay for) Candidacy, which encourages those members already in the know to work with and apprentice those looking to join that side of the business.

GOING ALL IN

Because of the longevity and significant liability inherent to commercial transactions, there’s a “learn it or refer it” attitude among these agents, where there’s no room for dabbling or half measures, and equates to a higher percentage of full-time, committed professionals on that side of the business because they also…

PAY TO PLAY

Commercial agents cannot afford to rely on a single membership to articulate their value and ethics, Tim says. They MUST have the knowledge, membership connections, and data to analyze because they know if they don’t, it’s not just a matter of not providing value, they could cost clients millions of dollars on a single transaction if they cannot do their job properly.

No one side of the industry is any better or more important than the other, but what’s glaringly obvious right now is the level of seriousness that commercial agents have always brought to their job. With all that has transpired in 2024, and with industry insiders like Brian Buffini attributing these issues to poor agent practices, it’s time residential agents took a few pages from the commercial books and held themselves to a higher standard. Because no matter the cost of a listing, your best should always be the standard in a time when a place to live or work is so vital. And really, shouldn’t that be reason enough?