What is a commercial real estate broker?
Before we dive in, let’s ensure you have a good understanding of commercial real estate brokers and what services they provide. A commercial real estate broker is essentially the middle-man between either sellers and buyers or landlords and tenants in commercial property transactions. They provide consultative guidance to their clients that either sell, lease, and/or purchase commercial real estate.
In Colorado, all real estate brokers have the same licensing requirements. However, the day-to-day activities and expertise will be very different for a ‘residential’ broker and a ‘commercial’ broker. Colorado regulations require a broker to be proficient and experienced in their area of focus. For instance, a broker whose primary practice is selling residential condos could get in hot water with state regulators if they broker a transaction representing a commercial office tenant.
Another area of confusion, depending on the state where the business is transacted, is between a real estate ‘agent’ and real estate ‘broker. If the person is licensed in Colorado, they are a broker. If a broker acts as an ‘agent’ that broker has a fiduciary obligation to their client which includes the following duties to his/her principal (the company or individual who they are representing): Loyalty, Obedience, Disclosure, Confidentiality, Reasonable Care and Diligence, Accounting. If a real estate broker is not acting as an ‘agent’ to their client, but as a transactional broker, the broker does not have the duties noted above. At Fountainhead Commercial, we choose to always act as an ‘agent’ to our clients with the duty of a fiduciary, even though we often refer to ourselves as a ‘broker’.
5 things to look for in a commercial real estate broker
1. Expertise in commercial real estate
We don’t want to play the role of Captain Obvious, but it’s important to ensure your broker specializes in commercial real estate. Anyone with a real estate license can handle transactions, but that doesn’t necessarily mean you’ll want them handling your deal. Although some brokers, usually in smaller, less sophisticated markets, work on both residential and commercial properties, you’ll want to ensure your broker has plenty of experience handling large-scale commercial transactions before entering into a contractual relationship.
2. An established business in the Denver-area
Real estate markets can vary greatly city-to-city and even differ significantly within submarkets of the same metro area. You’ll want to work with a broker who has an established real estate firm in the Denver metro area to ensure they know the “ins” and “outs” of the current market. That local emphasis will undoubtedly have a terrific influence on your real estate transaction.
3. Responsive and straightforward communication
Real estate transactions don’t happen overnight; they may take several months or even over a year to complete. It’s highly likely that you’ll be working with your commercial real estate broker for months at a time. It would be unwise to hire someone who just wants to collect a commission check but rather someone who will strongly advocate on your behalf and keep you up-to-date with all pertinent of the transaction details. At Fountainhead Commercial, we put your best interest first so the process is as smooth as possible.
4. Understanding of tax and zoning laws
Many people avoid investing in commercial real estate because of the complexities of the rules and regulations that surround the taxation and purchasing of commercial properties. A commercial real estate broker should have an in-depth understanding of how certain tax and zoning codes impact the real estate and can successfully navigate them on your behalf.
5. Demonstrated history of success
To a seller, it can be tempting to work with a broker who is less experienced as they may offer a lower commission percentage, but we strongly advise against it. When it comes to commercial real estate, it’s best to go with someone who has a demonstrated history of success. In this industry, experience really matters.
When interviewing a broker, don’t be shy; ask how long a broker has worked in commercial real estate, how many transactions they have closed as the ‘broker of record’ and what kind of experience they have working with clients similar to you. Testimonials and online reviews can also give you a good sense of their level of success and customer satisfaction.
Find commercial real estate brokers in Denver, Colorado
If you’re interested in working with commercial real estate brokers in Denver, Colorado, look no further than Fountainhead Commercial. We have over 40 years of combined experience in commercial real estate and an uncompromising commitment to strong core values, principles, and customer service.
Contact us today for commercial real estate brokerage expertise you can count on.