What’s the difference between a REALTOR®, Residential Broker, Commercial Broker and Business Broker? Although all assist in property selection, arranging financing, use appraisers and inspectors, and are skilled negotiators, the path and approach can vary greatly within each specialty.
A REALTOR® is simply a member of a trade organization which subscribes to a particular code of ethics. Residential, Commercial, and Business brokers all may be REALTOR®.
Residential and Commercial brokers both have the same licensure and are considered equal in the eyes of the Real Estate Commission. The major difference between these two is the area in which they specialize. A residential REALTOR® focuses on selling homes, mass marketing their listings to create as much awareness as possible, and matching homes with clients seeking new residences. Commercial brokers focus on leasing or selling office buildings, retail space, warehouse, industrial properties etc. Their focus is narrower and target marketed to investors and businesses on finding appropriate space or returns for businesses to operate while adding the various land/building use and zoning laws.
Business Brokers are not required by the Real Estate Commission to hold licenses, though most do. Often Business Brokers specialize in the confidential sale and purchase of already existing businesses. Sometimes businesses that are sold do not include real estate, for example a video store that leases space in a shopping center. Although the business is for sale, the space it occupies is not. The new owners may want to continue to lease that location or move to a new location. Someone who owns both the business and the location may actually need to hire a Business Broker as well as a Commercial Broker.
In many small towns and rural areas, Residential and Commercial Real Estate is often sold by the same brokers; there simply isn’t enough business for specialization. In large cities and towns, specialization is essential. The knowledge of markets and sub markets, the properties and players in each, the professionals that are ancillary to the transactions, can make the difference from a smooth successful transaction vs a nightmare. Some times a broker that specializes, even if from one of Maine’s Larger Cities, might be a better choice than a rural real estate broker. This is especially true in business brokerage.
When it’s all said and done, you are looking for expertise. The generalist just might not cut it.
By scott Balfour