The Basics of Commercial Real Estate Brokerage
The commercial real estate market in Nashville is growing, changing, and evolving. These changes can be difficult to keep up with. This is why many potential business owners in Nashville seek out a commercial real estate brokerage firm. These firms have intimate knowledge of the commercial real estate market and can help their clients both find and lease a property in a way that most benefits the individual.
These firms also act on behalf of the property owners looking to lease out a space. These individuals need guidance in not only getting the best deal for their available location, but to be sure all of the legal bases are covered.
But what does a commercial real estate brokerage firm in Nashville actually do? Here is what you need to know.
Broker vs Agent
The terminology of the real estate world can get a little confusing. There seem to be many terms for the same job. However, there are differences between a real estate agent and a real estate broker.
A real estate agent facilitates the sale of a property. They act on behalf of either the buyer or the seller to negotiate the specifics of the deal. Their compensation comes in the form of commission when the process is complete.
A real estate broker also assists with the sale, lease, or purchase of a property. They represent either the buyer or the seller. And although agents and brokers both possess a license to sell property, a broker is also licensed to own a real estate firm. A real estate agent must work underneath a real estate broker.
Contact Southeast Venture, a commercial real estate brokerage firm in Nashville, to see what they can do for you today.
Becoming a Broker
Since a broker is essentially a real estate agent with an extra license, the first step to becoming a broker is to get the real estate license. This isn’t required in all states, but it is required in most. This usually involves the individual taking a series of real estate classes and passing a certification exam.
Experience is also required to become a broker. The requirements vary by state but the generally agreed-upon range is between one and three years of real estate experience. Those with a goal of becoming a commercial real estate broker will want to work with a commercial real estate firm, or under a commercial broker. This experience helps the individual develop the necessary skills to become a broker.
The next step is to take another set of real estate classes and pass another exam. These classes delve deeper into the real estate industry and require an extra level of knowledge. This education will need to be maintained as the license needs to be renewed every two to four years. Some states will require passage of a new test every time the license needs to be renewed.
Working with Tenants
Commercial real estate brokers can work on behalf of a tenant who might not feel comfortable dealing with their landlord. The broker can help negotiate a lease that is comfortable for the tenant. These documents are often difficult to understand and can occasionally include extra items that the tenant might miss. These extra items can effectively become additions to the rent.
The broker works on behalf of the tenant to get them the best deal for the space they can. This is beneficial to the tenant because these discussions can become intricate and convoluted.
Working with Landlords
A landlord with an open property will place a listing with a commercial real estate broker. The broker then goes out to find a tenant for the property. This can be done through a number of different means—posting the open space on public boards, personal contacts, or notices on their website.
Occasionally, a potential tenant will find the property through their own broker. It is then the responsibility of the listing broker to act in the landlord’s best interest when negotiating a lease agreement. The agent’s fee is usually taken as a percentage of the proposed lease cycle and amount of rent.
Working with Both Tenants and Landlords
Commercial real estate brokers frequently work on both sides of the lease agreement. Their knowledge of the real estate market prepares them to adequately represent both tenants and landlords, so they often offer both services.
This setup works smoothly in the majority of cases. However, the broker will occasionally introduce a property to a potential tenant that is represented by another agent at their firm. The broker is obligated to work in the best interest of their client, but this awkward position can make some people uncomfortable.
Some states allow brokers to step away from their role as an advocate for a particular side. Instead, they act as a neutral third-party to oversee certain details and make sure the process progresses smoothly.
Are you a Nashville business in need of a commercial real estate brokerage firm? Contact Southeast Venture today to see how they can help you.