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How to Become a Licensed Commercial Real Estate Agent

CEO Khai Intela
I often receive inquiries from people asking me how to become a licensed commercial real estate agent. Whether you're a residential real estate agent looking to transition into the commercial sector or coming from a...

Commercial Real Estate Agent Nathan K Smith at Work

I often receive inquiries from people asking me how to become a licensed commercial real estate agent. Whether you're a residential real estate agent looking to transition into the commercial sector or coming from a different industry altogether, there are a few things to consider before making the leap. Contrary to popular belief, being a part-time commercial real estate broker is not as simple as it seems. Commercial transactions are more complex, and clients are less likely to hire someone who is only committing part-time. In this article, we'll explore the process of becoming a licensed commercial real estate agent and what it entails.

What is a Commercial Real Estate Agent?

A commercial real estate agent represents various parties such as investors, buyers, tenants, owners, and landlords in lease or purchase transactions involving office space, retail space, warehouse space, multifamily properties, storage facilities, mobile home parks, land, and other commercial real estate assets. Compared to residential real estate transactions, commercial deals tend to be more intricate and take longer to close. Some people may also refer to commercial agents as brokers.

Do I Need a Commercial Real Estate License?

Yes, obtaining a real estate license is a requirement for both residential and commercial agents. The licensing process entails taking specific real estate courses and exams. The total number of hours and additional college credits needed may vary depending on the state you're in. For example, in Texas, the Texas Real Estate Commission mandates 180 hours of coursework and a state exam to earn a real estate license. The exam typically consists of multiple-choice questions and is manageable with adequate preparation. Once you have your license, you can pursue a career in either residential or commercial real estate sales or leasing.

Finding a Commercial Real Estate Agency to Work For

While completing your courses, it's a good idea to start considering whether you want to focus on residential or commercial real estate. Additionally, you should begin searching for a broker to work under. Finding a sponsoring broker is often a prerequisite for taking the licensing exam. Keep in mind that breaking into the commercial real estate industry might not be easy, and you'll likely need to invest time in door-knocking and networking unless you have existing connections.

A Few Ways to Get Your Foot in the Door

  • Work for a company that handles both residential and commercial properties: Choosing a company that deals with both types of real estate can help you start earning money more quickly since residential transactions are typically faster and less complex. Keep in mind that some firms specialize predominantly in residential or commercial real estate, so finding a balance between the two may require some research.

  • Consider doing an internship during college: If you're still in college, embarking on an internship can offer valuable industry experience and allow you to network with established commercial real estate agents. After graduation, you'll have a strong network to leverage.

  • Take a salaried marketing or market research position: If you're hesitant to jump into a commission-only role, starting off in a salaried marketing or market research position within a real estate firm can be a good compromise. This allows you to receive a steady income while gradually learning the ropes. However, expect the salary to be modest, ranging from $25,000 to $40,000 per year.

How Much Do Commercial Real Estate Agents Make?

There is a wide range of income potential for both residential and commercial real estate agents. On average, commercial agents tend to earn more than their residential counterparts, with median earnings of around $100,000 compared to $40,000 for residential agents. However, these figures can be skewed as many residential agents work part-time, whereas commercial real estate requires a full-time commitment. Ultimately, the amount of money you make as a commercial real estate agent depends on your hard work, dedication, and the speed at which you build your client base.

Is Commercial Real Estate Right For You?

It's important to acknowledge that the commercial real estate industry is not suitable for everyone. Prospects and clients can be harder to acquire, deals take longer to close, and it generally takes a longer time to start earning money. Moreover, working as a commercial real estate agent is typically commission-based, which means there may be months without a paycheck, especially for deals that take longer to finalize. This requires you to establish a robust pipeline of potential clients as quickly as possible. Additionally, be prepared to face rejection and remain confident in a social, cold-call-oriented industry. If you can weather these challenges, stick to a plan, and never give up, a career in commercial real estate can be rewarding and lucrative.