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 Making the Leap From Commercial Real Estate into Residential
January 26, 2021

Making the Leap From Commercial Real Estate into Residential

by The CE Shop Team

Leaving Commercial Real Estate for Residential Has Its Benefits

With COVID-19 still ravaging society, many people are reconsidering their careers. This Great Pause is allowing professionals across all industries to take a step back and think to themselves, “Is this what I really want to be doing with my life?”

When it comes to commercial real estate agents, this sort of inner contemplation usually happens before they join the industry. However, times have changed. Limits on retail and restaurant indoor dining combined with delays in foreclosures are creating an unfathomable situation all commercial real estate agents are slowly acknowledging. Landlords can’t collect rent, which means commercial real estate companies can’t pay the banks on any leveraged deals they’ve done in the past few years. When the CARES Act ends, there will be a reckoning that could divulge subsections of the commercial real estate industry into an imperiled void.

If you’re a commercial real estate agent, considering a temporary or permanent switch into residential real estate could be right for you.

Residential vs. Commercial: What Is the Difference?

Properties

Unsurprisingly, commercial and residential real estate agents sell different types of properties. Residential properties are usually smaller properties designed to home a person or family. Meanwhile, commercial properties are larger and comprise offices, retail, and storage space. The former is meant for people while the latter is intended for corporate and local business operations.

Residential Properties Commercial Properties
Size: 1-4 Units Size: 5+ Units
Homes Hotels
Apartments Industrial Buildings
Townhouses Retail Buildings
Condominiums Office Buildings

Clients

When it comes to the economy, the majority of residential clients are less affected by economic situations because of the inelastic demand for homes. Whether it was our ancestors searching for the driest cave in Lascaux or your grandmother staking out the best high-rise in Ft. Lauderdale, people are always going to need a roof over their heads. Commercial clients are different; they’re greatly affected by the economy because commercial properties are sold with steady returns and cash flow in mind. A pandemic with an increase in remote work technology throws a massive wrench in that plan, making the industry even more sensitive to the economy’s performance.

Residential Real Estate Clients Commercial Real Estate Clients
Easier to Find Harder to Find
More of Them Fewer of Them
Take Less Time to Sell Their Properties Take More Time to Sell Their Properties

Earnings

Agents working in residential real estate have a greater number of clients, but the properties have less earning potential. This makes sense considering the median home value in the U.S. is $340,000 while a commercial real estate property could be worth upwards of tens of millions of dollars.

Residential Real Estate Agent Earnings Commercial Real Estate Agent Earnings
Need to Sell More Properties to Meet Commission Goals Need to Sell Fewer Properties to Meet Commission Goals
Earn a Lower Commission on Less-Valued Properties Earn a Higher Commission on More-Valued Properties

Worklife

Residential agents are expected to work at unconventional work times but are often free to create their own schedules. This flexibility provides for a more independent career that allows for more freedom at the cost of a strict 9-5 schedule. Commercial real estate agents follow a more common work schedule that provides structure but less freedom to do as they please. It’s also one of the reasons why residential is conducive to working part-time in the field while part-timers are much less prevalent in commercial real estate.

Residential Real Estate Agent Worklife Commercial Real Estate Agent Worklife
Works After-Hours and Weekends Works a More Consistent Office Schedule
Can Work as Part-Time Agent Works Primarily as a Full-Time Agent
More Freedom From Daily Office Hours Less Freedom From Daily Office Hours

Why Make the Leap From Commercial to Residential?

There are many reasons why commercial real estate agents can make a seamless transition into residential real estate. Although these are two different sub-industries, the concept of an agent doesn’t change: Can they sell a property? Having the personality of genuine salesmen who can help families in town find their dream home is something that’s needed within the residential sector.

There are also other considerations as to why an agent should leap into the residential sector. Home transactions are mostly recession-proof and do not usually mimic the state of the economy. There’s also the chance a commercial real estate agent doesn’t want to leave the sub-industry but would like a similar side-hustle in the residential realm. Best of all, there’s no need for extra training as long as the agent is up to date with their Continuing Education requirements.

If you’re thinking about selling homes over commercial real estate, ask yourself the following questions:

Personality Type: Can you sell and help cater to families instead of banks and corporate clients?

Quicker Transactions: Are you okay with implementing quick turnarounds when it comes to taking a client on to the purchase or sale of the home?

Volume: Are you comfortable with pursuing more opportunities while working a more flexible day-to-day schedule?

Both of these careers include their own set of benefits and obstacles. When considering a change into residential, you’ll want to weigh all your options and then commit to a path you feel best meets your needs. In the end, the choice is yours to make.

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