Who is a Commercial Real Estate Broker?

David Cohn
Mar 10, 2021

A commercial real estate broker is essentially a middleman who helps clients buy, sell, or lease commercial real estate. Certified brokers have the freedom to work as brokerage firms, as independent agents, or as employers of commercial property agents.

Q1: Is a commercial real estate broker different from an agent?

Yes. A certified commercial property broker can work independently, whereas a commercial real estate agent cannot. Agents have to be employed by licensed brokers.

Q2: How does one become a commercial real estate broker?

People who want to pursue a career as commercial property brokers have to fulfill several educational and legal requirements.

Educational Qualifications:

A high school diploma is the most basic requirement for those who want to become commercial property brokers. That said, many of the most successful brokers in the industry pursue higher education, often arming themselves with degrees in related fields such as business, finance, economics, or statistics.

Legal qualifications:

To become a certified commercial property broker, one must obtain a state license—and they need to pass an exam to get this license.

Not everyone can take the commercial real estate broker exam. To be eligible to sit down for this type of test, one must (1) be employed with a brokerage firm for at least one year (sometimes three years, depending on the state), and (2) take 60 to 90 hours of licensing courses approved by the state.

Only after completing state-approved licensing courses is someone allowed to take the exam. The test is designed to measure an individual’s knowledge about prevailing state and federal laws affecting the commercial real estate sector.

Those who successfully pass the exam become licensed and certified commercial real estate brokers. But it doesn’t end there.

To hold onto their license, certified brokers must complete a relevant continuing education program every 2 to 4 years (depending on the state).This includes courses in real estate appraisal, commercial property law, mortgage loan brokers, etc. Those who wish to practice their profession in several states have to fulfill the requirements of the strictest state.

Q3: How do commercial real estate brokers earn money?

Commercial property brokers earn commission-based income. Brokerage commissions are negotiable, averaging about 6% of the sales price. The commission is based on the net rental income and square footage for commercial properties that are being leased instead of sold.

Q4: What are the advantages of hiring a commercial property broker?

Whether you’re a buyer or a seller of commercial properties, working with a broker can help you save money and time. They can do the following for you:

Ensure you understand all tax & zoning laws:

Commercial property investing is notoriously complicated because of the ever-changing rules and regulations in this industry. A broker understands all applicable tax and zoning laws and can complete documentation formalities on your behalf while ensuring your compliance.

Evaluate business plans:

A broker can look at your business plan and determine if your commercial property project is feasible.

Conduct research:

A commercial property broker can also provide you with the information you need about local demographics, environmental quality, businesses, the desirability of the location, and property maintenance costs (to name a few) so that you can make better decisions about your investments.

Perhaps the biggest advantage of hiring a commercial property broker, however, is getting access to deals that you otherwise may not even hear about. Good brokers have established networks in the communities they work in, ensuring that their clients enjoy a first mover’s advantage when properties come up for sale or when prospective buyers emerge.