We have all seen it before. Resi agents that take on office or shopping center listings. Despite me never seeing a Resi agent list a Class A asset I still find it a bit ridiculous when I see them take on this jack of all trades position to listing properties rather than referring it over to a CRE broker that specializes in the appropriate asset class.
As you can likely tell, this is a bit of a pet peeve of mine and I was just curious what everyone's thoughts were.
Yep. Don't see it happen often in SoCal, but it does. Often times if the owner/developer is private, they give the listing to their idiot nephew as a favor and it makes the process more challenging. There is never a sensible approach to valuation, it's always "he says it's worth a 3 cap, so that's what he wants". Don't waste your time with those jokers.
I once had one of these types send me an office building priced at a sub 5 cap (in a 6 cap market) and wasn't even factoring property taxes into their OpEx (which would have made the true cap sub 4 at their price).
Explained it to him, could almost hear the wind blowing between his ears.
LOL @ the idiot nephew comment. I've seen that with my own two eyes.
Think I read somewhere that something like 300,000 or so residential real estate agents take on a commercial deal in a given year.
That is so insane to me.
The way I view it, Resi agents that do this do not have their client's best interest in mind. Especially given that if a seller is using a Resi agent for commercial property, they are likely not sophisticated owners and likely need extra attention. Just my two cents.
I tend to agree. Some deals might be super simple, however, like the sale of a commercial condo to a user. I suspect those types of deals probably comprise a lion's share of the commercial transactions.
Yeah, i tend to agree as well. We are definitely doing the commercial client a dis-service taking on the sale of their building when residential is what we specialize in.
I'm a resi agent and have referred out the few commercial lease leads i've gotten. We have one agent in our office who does strictly commercial for the last 20+ years and we have to partner up with him if we decide to take on a commercial deal. Our broker won't allow us to individually work on them because most of us don't have the E&O to cover commercial transactions.
Oddly enough though, one of the top commercial brokers in my area operates under a residential firm and absolutely kills it. I think $5.1 billion sold in the last 29 years
I have had to deal with this on both sides as an investor and broker. I have an extremely large deal that a resi broker is representing the buyer. On the other hand, I tried to buy a small multi family in an up and coming sub market where a resi broker screwed up the deal for me. I'm still very upset even though this happened almost a year ago. Some are better than others and know their place.
Residential agents are the worst thing to ever happen to commercial real estate. No recession could ever screw up the market as bad as a residential agent thinking they can do commercial.
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