Become a commercial real estate agent – 6 Easy steps

26 Apr, 2022

Become a commercial real estate agent – 6 Easy steps

Spread the love

Ever considered commercial real estate as a profession? Well it is somewhat different to residential real estate and needs more preparation. Helping homeowners buy and sell in residential real estate is rather different to the complex and rather challenging world of commercial real estate. Read on to learn more about this fascinating and rewarding industry and how you might plan your career.

Become a commercial real estate agent – 6 Easy steps

Starting your career as a commercial real estate agent involves more than just acquiring the right licenses and skills – setting up your business structure is also crucial. If you are planning to operate in Texas, it’s important to understand ways to form an llc in Texas.

Doing this can provide significant benefits, including personal liability protection and potential tax advantages for your real estate business.

commercial real estate
Some housing estates are purpose built as commercial propositions

Do you want to work as a successful real estate agent? If yes, the decide if you want to work in either commercial, or residential real estate. It is easier to break into residential real estate. This is because there will always be more clients and transactions. It is widely known that more individuals are likely to buy or lease a place to live, rather than find a location to run a business.

On the other hand, commercial real estate can attract a large number of lucrative clients. The appeal is that it attracts investors with more consistent returns and cash flow than residential properties. It also, therefore, allows agents to earn more money.

Indeed, according to, the average compensation for commercial agents in the United States was $90,914. While the average salary for real estate agents was $50,897. The latter statistic skewed towards residential real estate agents. So, if you want to make more money, you need to know what it takes to become a commercial real estate agent.

However, you need to understand both the benefits and the drawbacks of the industry.

The commercial appeal of real estate

Understanding your product and knowing what you’re offering is the first step to success. This is true in any profession. However, commercial real estate (CRE) is a term that refers to properties that are intended to generate revenue. And this has a very specific and enduring appeal.

Such commercial properties include, for example, venues where businesses conduct their business. They also include multi-family domestic structures, and hotels. Typically, they are owned by investors who collect rent from each business or tenant that operates on the premises. And so they provide revenue and income to the investor.

What does it mean to be a commercial real estate agent?

There are around 3 million real estate agents in the US, according to the Association of Real Estate License Law Officials (ARELLO). Those who work with commercial real estate are known as commercial real estate agents. Their residential counterparts, deal solely with residential properties.

CRE transactions are generally more complex than residential deals, necessitating specialization and accreditation.

CRE agents also frequently represent buyers and sellers and lessors and lessees. Their brokerage occasionally compensates them in addition to getting commissions. Because the CRE business has so many different niches, the scope of labor may likewise vary. CRE agents, for example, can be property managers, appraisers, or real estate developers in addition to selling, buying, and leasing.

The best way to become a commercial real estate agent?

So If you are wondering how to become a commercial real estate agent follow these steps:

Get a real estate license first

To represent buyers and sellers and lessors and lessees in property transactions, all US real estate agents need a license from the state in which they want to practice. You’ll need the same license whether you’re selling commercial or residential properties. To secure your license, you’ll need to do the following:

Meet the Eligibility Requirements of the State

Each state has its own set of regulations and licensing requirements. A minimum age, a background check, and high school graduation are common criteria. Check to determine if your state has a reciprocal licensing arrangement with other states. This means that having a license in one jurisdiction may allow you to practice in another.

Take the approved pre-licensure classes 

The number of hours and substance of required courses varies by state. New York, for example, requires 75 hours of coursework, whereas Texas requires 180. Real estate foundations and laws and national and state-specific subjects are covered in the courses. These courses are similar in difficulty to first-year college courses.

These range in cost from $150 to $500, depending on the state and format (such as live, online, or independent study).

Pass the test

The state normally administers the exam, consisting of 75 to 150 multiple-choice questions. Pre-exam study guides or programs are also recommended because there are about 50-60% pass rates. The results will be posted around a week later, and the license will be issued a week after that.

2. Locate a commercial real estate brokerage firm.

Once you’ve been licensed, you’ll need to choose a commercial real estate agent to obtain experience in the area you want to work in. If you’re looking for commercial work, these are your two best options:

Some brokerages have specialists in both residential and commercial real estate

Real estate brokerage specialising in commercial and residential properties

Residential transactions can provide more consistent income. This is because they are easier to find and close, whether your client is renting, buying, or selling. Furthermore, as a new agent, you’ll find it more challenging to find commercial agreements.

So, while you work toward becoming a commercial real estate agent, you may learn from other local agents and work to create your client base.

The drawback is that few brokerages have a balanced mix of business and residential deals. As a result, you may have less exposure to business deals than you would in a commercial real estate agency.

Commercial real estate brokerage that only works with commercial real estate

A brokerage focusing solely on commercial work typically  has the advantage of salaried training programs for new associates. These programs can span a year or more, allowing trainees to focus completely on CRE. Meanwhile they are learning the ropes and not relying on residential deals for income.

It is worth noting that brokerages with training programs are also more competitive to get into. Nonetheless, before conducting their first commercial transactions, compensated trainees will likely earn between $25,000 and $45,000 per year. All the same there is risk. Keep in mind that certain training programs are not paid.

In addition to the two techniques listed above, try finding an internship. Interning or working in the marketing department of a commercial brokerage before securing your license is another way to launch your career in CRE.

3. Become a realtor or a member of a professional association

Many commercial real estate businesses require agents to join a professional association at the national or state level. In this case you could approach the NAR, ULI, or the REBNY. This is an important step because these associations provide ongoing education, networking opportunities, and supply and service discounts.

Please note – this is one of the most significant suggestions for being a successful commercial real estate agent (such as manuals, software, and more).

You can also become a realtor by joining the National Association of Realtors (NAR). This association represents more than one million residential and commercial real estate professionals in the US. Realtors are agents who adhere to the National Association of Realtors’ code of ethics.  NAR membership will enhance your professional credibility.

commercial building safety
Commercial buildings usually have complex sales procedures
  1. Develop a niche

It’s crucial to specialize to focus your attention and have a better grasp of your niche. This is because there are so many varieties of commercial properties. Specialization also allows you to target your desired clientele better and establish your reputation. You can specialize in a variety of property categories.

These include: office, retail, industrial. There are also sub-specialties for particular specialized building functions, such as laboratories.

  1. Develop a marketing plan

Mentorship and professional organizations can help you learn about your area’s commercial real estate market. You will still need to develop an overall marketing strategy. You will need to build a website to gain online presence. Make sure your website agency has idx real estate experience like this.

Above all when planning your marketing make sure to consider:

  • the kind of properties you want to focus on
  • how you want to target clients
  • your unique selling proposition (USP)
  • a budget
  • marketing formats
  • success metrics.

You may also build on this by referring to generic marketing plan principles for a lead-generation roadmap.

  1. Look at other career options

Aside from sales, a commercial real estate agent can work in development. This entails buying land and building on it, securing financing, negotiating tenant leases and managing the process. You could also consider salaried property management (which includes handling day-to-day operations, such as repairs, staffing, and so on).

Things to consider before entering the industry

Before you decide to get into CRE, you should think about the following:

Is Your Personality a Good Fit?

Finding clients and leads is critical to your business’s success. You must have or acquire a salesperson’s attributes. It is therefore important to be proactive, persistent, competitive, ambitious, and able to persuade others to buy your product. It’s also essential to be outgoing and happy to make cold calls and talk to strangers.

Meanwhile, as more technical tools enter the area becoming tech-savvy is becoming necessary. The market is constantly evolving and staying current and aware of the newest knowledge and advances is critical.

Understand the differences between commercial and residential agents

Being a commercial real estate agent is quite distinct from being a residential real estate agent. It comes with its own set of challenges:

Education Requirements are Strict.

You must have a state-issued real estate license to practice both types of real estate in your state of practice. However, it is not essential to have a college degree as a residential agent. On the other hand, CRE agents frequently require a degree — preferably in business or finance.

This is because the position necessitates knowledge of more complex concepts e.g. capitalization rate and internal rate of return.

Further Education

While both types of agents need some field experience, CRE agents require additional training. Secure the training through mentorship programs with a commercial broker. The more complicated types of transactions and properties in CRE necessitate this additional experience and guidance.

The involvement in more complex properties

You’ll be selling larger assets in CRE. Examples might include shopping malls, industrial estates or office buildings. As a result, you’ll need to be familiar considerably more details that affect the property and value. These might include economic cycles, unique tax regulations, and gross rent multipliers, to name a few.

Fewer transactions.

Selling a home is easier than selling a much larger and often more expensive business property. Residential real estate agents will therefore make more sales per year. However, they earn smaller commissions. Yet, as a commercial real estate agent, you’ll earn larger commissions for each transaction but secure fewer deals per year.

A distinct clientele

Residential agents have an easier time finding new clients. There is a larger pool of residential candidates – 130 million homes in the US. In addition, buying and selling residential properties can be considered a type of consumption. It is a home they will buy and sell, a location where people dwell.

On the other hand, commercial properties are purchased only for investment. And because of their higher price tags, finding clients can be a challenge.

Working hours that are more traditional

Residential real estate brokers must work unsociable hours to accommodate clients and property viewings.

As a CRE agent, you’ll typically work five days a week during business hours. You’ll must also spend time networking and promoting. This can take up a lot of your time. Furthermore, working part-time isn’t always a possibility as a CRE agent because you’ll be working for a brokerage. However, residential agents can work part-time as a lifestyle choice.

Tasks of various types

As a CRE agent, you’ll be expected to visit commercial properties regularly. You need to learn all about the properties you’re representing. You need to understand details such as the cap rate, local population growth data, etc. However, knowing such complicated metrics is not required as a residential real estate agent.

Visits are typically limited to properties whose sellers you represent. A basic understanding of the local residential real estate market is usually enough to sell the property.

Becoming a commercial real estate agent in Summary

If you’re thinking about becoming a real estate agent, then consider these important points. There are many things to think about before diving into the complicated world of CRE. While it offers large commissions and a wide range of specialties, it also comes with challenges.

You need to prepare and secure the higher educational requirements Consider there are longer closing periods. And importantly remember, there maybe fewer deals per year. Therefore, to properly grasp if CRE is suitable for you, the most critical step is to examine all factors.



Trading in real estate – 4 Tips to know

Tips for real estate agents – How to get more clients

Picking a real estate agent – Be in the know

Selling a property for the first time – What not to do

Housesitters to manage a vacant property

Spread the love


Founder and Director of HouseSitMatch - I'm a hands-on Admin on the site. Please ask any questions and as soon as I can I'll happily answer and assist where I can.

Leave a Reply

You must be logged in to post a comment.