Selecting the Right Broker

By Scott Balfour

What’s the difference between a Residential Broker, Commercial Broker, and Business Broker? Although all assist in property selection, arranging financing, recommend appraisers and inspectors, and are skilled negotiators, the path and approach can vary greatly within each specialty.

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 of expertise. Residential Brokers focus 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 selling and leasing office buildings, retail space, warehouses, industrial properties, etc. Their focus is usually on finding appropriate space for businesses to operate while adhering to the various land/building use and zoning laws.   Their marketing is often very focused on key potential prospects.

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 in 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 that has a real estate license.  Most likely a Business Broker that also is active in Commercial Real Estate would be the best choice.

While Commercial and Residential Brokers are free to advertise their listings to the general public, Business Brokers must adhere to strict confidentiality. If a business was publicly advertised as being for sale think about the potential devastation to employee morale, the advantages competitors might take, and the customer concern of why the business is for sale. This is why confidentiality is key and nobody understands that better than a Business Broker.

In many small towns and rural areas, Residential and Commercial Real Estate is often sold by the same broker; there simply isn’t enough business for the specialization. In large cities and towns, specialization is essential.  The knowledge of markets and sub-markets, the properties and players in each, and the professionals that are ancillary to the transactions all can make the difference between a smooth successful transaction and a nightmare.   Sometimes in a rural location a broker that specializes, even if from one of Maine’s larger cities, might be a better choice than a rural Realtor.

When it’s all said and done, you are looking for expertise.   The generalist just might not cut it.