Ambassador

Monetizing Commercial Referrals

HOW DOES A RESIDENTIAL AGENT MAKE THOUSANDS OF DOLLARS FROM A SINGLE PHONE CALL? IT’S SIMPLE: REFER COMMERCIAL LEADS TO A COMMERCIAL AGENT.

By: David Kinnard, MBA, Director KW Commercial

Why not take a “DIY approach” with commercial deals? Technically, a residential agent can sell commercial real estate because in the state of Florida there is not a separate commercial license or residential license.

But the fact is that buyers of residential and commercial are completely different. “It is two entirely different animals,” said Ben Bakker, 2022 President of the Commercial Real Estate Alliance. “Not just in procedure, but in communication styles on who your client is, residential buyers are far more emotional because a large percentage of residential buyers are in the process of acquiring something they are going to live in, that they are going to celebrate Christmas in, they are going to raise children in, and live their lives in… you can’t do that transaction without emotion.” He continued, “Whereas commercial is more about the bottom line, profit, and loss, black and white, there is very little emotion in commercial real estate.” The question in a commercial transaction is, “does it make sense for the bottom line?”

He continued that there are some guardrails in place that are intended to create separation between agents who practice residential and commercial transactions. For example, the NAR Code of Ethics article 11, paragraph two, states “Realtors® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service.” In addition to the Realtor® Code of Ethics statement, many brokerages that offer commercial and residential services have strict rules against residential agents practicing commercial real estate and vice versa. They do that due to the liability issues it creates for the brokerage.

If a residential agent has a client who needs commercial services, a great way to serve that client is to refer the client to a commercial agent. “It is a huge compliment when one of our residential agents feels confident enough to entrust their client with me,” Bakker said. “I love writing referral checks.”

That is truly the same sentiment of all commercial agents who work with residential agents. The best way for a residential agent to monetize their commercial leads is to refer those clients to a commercial agent.

RASM has a specialty group called the Commercial Real Estate Alliance (CREA), which is a group of professionals dedicated to commercial real estate in the Sarasota and Manatee areas. It is a great place to meet and interview local commercial agents to build a bench of commercial agents to send commercial referrals. Furthermore, CREA is the place to go for anyone wanting more information on making a career in commercial real estate. There are educational classes and seasoned commercial agents who can discuss the opportunities a career in commercial real estate can offer. •