Do commercial brokers truly tend to earn more than residential agents?
Hey guys,

Little Background: I'm a senior in college graduating in May with a degree in Finance. Originally I was set on becoming a CFP after college. Around a year and a half ago I decided to shift my focus on Commercial RE Broker. I spent 5 months interning at a full service Realty company, but spent most my time doing property management stuff (definitely do not want a career in that). I am the type of guy who could sell sand to a beach. 

I am still very interested in being a commercial broker, I have another internship set up in the spring which i hope will turn into a job when i graduate. From what I've gathered is Commercial Brokers traditionally make more income then Residential agents. Is this true? I know that transactions for commercial are always way more but commission in Commercial is always under 2% and it takes longer to sell commercial properties than houses. 
[{"id": "dpc75tu", "text": "All depends on the amount of work you put into it. I'm a broker in Chicago and I knows guys who can barely break six figures and I know others who don't make less than $750k a year. ", "replies": [{"id": "dpc7dz9", "text": "Which property type?", "replies": [{"id": "dpc7og8", "text": "Industrial and office. Hands down office will make you more money though. ", "replies": [{"id": "dpcnwgy", "text": "Office vs. industrial depends on the city. Plenty of industrial brokers make 7+ figures.", "replies": [], "depth": 4}, {"id": "dpiibwk", "text": "The top industrial guys in my firm are pulling down near or above seven figures. ", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "dpcpwyw", "text": "How do you like Multi-Family I got offered an internship with a multi-family development group over the summer. I sat in with a broker I was shadowing at a CoStar presentation and my general conclusion was that multi-family especially in the south where I live is doing really good right now. ", "replies": [{"id": "dpcrabw", "text": "I haven't dealt in multi-family at all; I focus on industrial and office. ", "replies": [], "depth": 3}, {"id": "dpd26ot", "text": "MF is strong in the south in general. Main thing is to make sure you are challenged and enjoy the company you will be keeping. CRE is a tough business, worth it if you\u2019re with the right group and overly challenging when unequally yoked. Broker beware. ", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "dpc7iay", "text": "Yes. But it's because everyone tries to be a real estate agent, but nobody can delude themselves into thinking they're a commercial broker without making a sale for a year. In general the successful commercial brokers will make far more, but I would compare their job to owning your own residential brokerage, which can also be lucrative. ", "replies": [{"id": "dpij0ro", "text": "Being a commercial broker is not the same as owning a residential brokerage.  The business acumen required to be successful in commercial far exceeds what is required for ownership of residential brokerage.  I\u2019ve watched residential brokerage owners bumble their way through commercial transactions.  ", "replies": [{"id": "dpo090a", "text": "Did I say it was the same, or did I say its a better comparison than a real estate agent? I generally view realtors as incompetent, and commercial brokers as competent but slimy. ", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "dpcbtwx", "text": "Honestly, as an individual investor (as opposed to institutional), I would never use a commercial broker who can \"sell sand to the beach.\"\n\nCommercial is about the numbers and the deal. The deal either works for both parties based on their investing criteria, or it doesn't.\n\nIMHO, the best commercial brokers are the number crunchers, are strong investigating due diligence, and are trustworthy - not someone who is out to make a sale.  Commercial shouldn't be about emotions, it should be about the numbers.  The second I feel \"sold to\", I stop using that broker.", "replies": [{"id": "dpcfl2q", "text": "Well, I don\u2019t know how I portrayed that I have an irresponsible personality when it comes to sales. I\u2019m sure you can agree Commercial Brokerage is a sales job. Is it not possible to be good at selling and also be responsible when it comes to crunching the numbers and due diligence?   \n ", "replies": [{"id": "dpd2lkh", "text": "The dichotomy of our business...the majority of successful brokers are great at sales but can be subpar at transactions. You can do both to a certain point, but eventually most have to compromise one for the other. Unfortunately for the clients, these brokers choose sales (deal flow/magnitude) to go after the money. ", "replies": [], "depth": 3}, {"id": "dpii6t6", "text": "Selling is part of the job, its how you sell that\u2019s different.  In residential is more emotional, your dealing with mostly novice real estate buyers looking for a house, not much different than selling cars.  Set budgets and somewhat flexible parameters.  \n\nIn commercial, emotions do come into play, but your clients are likely knowledgeable about real estate.  They have very specific requirements for their use or investment strategy and are always focused on the numbers.  The emotional part tends to lean towards professionalism, your ability to work a deal and to effectively negotiate a deal at a very high level.  ", "replies": [], "depth": 3}], "depth": 2}, {"id": "dpcudj0", "text": "That\u2019s the primary difference between selling to, for a lack of a better phrase, \u201cordinary people\u201d and investor/business types.\n\nThe latter tend are all about the figures, so it is easier to be straight with them. With the former, they\u2019re too scared or ignorant to know what a good deal looks like and I often have to be salesman with them. \n\nI work in residential mortgages,  not commercial real estate, but my favorite people to work with are the professional types, especially accountants. ", "replies": [], "depth": 2}, {"id": "dpd2dur", "text": "I would tell OP to focus on adding value and to become a bona fide dealmaker. Parties on both sides will have their preferences and complain about this or that, but the fact remains that deals don\u2019t do themselves, it almost always requires a dealmaker to bring it together ", "replies": [], "depth": 2}, {"id": "dpd4r6r", "text": "read this one twice^ the best advice is he said especially for commercial is both sides win. you don't have to sell sand to a beach  you just deliver what both sides want and need. \njoin this and see if it helps\nhttp://retailbrokersnetwork.com/", "replies": [], "depth": 2}], "depth": 1}, {"id": "dpcx82n", "text": "The average commercial broker flames out of the business within a year or two. Often times this has nothing to do with skill level, talent, personality, or desire. Please factor that into your decisions. ", "replies": [{"id": "dpd2npq", "text": "True. But you have to walk it out to figure it, out, knowwhatimsayin?", "replies": [], "depth": 2}, {"id": "dpdmi6r", "text": "Why do they burn out? I\u2019ve been considering a career change, and being a commercial broker is on the list of options. ", "replies": [{"id": "dphw8ay", "text": "Tough to stay in a job when you go a year and half without closing a deal. Especially in prime markets, and especially in desirable asset classes (Class A office space In Manhattan for example) a new broker is going to have a really tough time latching onto the business. In that scenario, 2/3 of new brokers who are successful are the kids/nephews of people who are in real estate. ", "replies": [{"id": "dphwqba", "text": "Gotcha, thanks for the reply. Do you have any input on small markets? I\u2019ve recent relocated to a small vacation town, so I\u2019m assuming competition isn\u2019t too fierce, but the market is pretty tiny as well. \n\nI don\u2019t need income for a year or two, as my wife\u2019s income could support us indefinitely if necessary. Not sure if that\u2019s relevant. ", "replies": [{"id": "dpi0mdt", "text": "No experience in small markets, so I don't have anything direct to offer. I'd conjecture that in addition to the competition being less fierce in your area, there is probably a dearth of business. You're probably going to be looking more at retail stuff and that's got two issues: 1) Retail is dying. 2)Strip malls tend to be where the business will be. There's probably a broker or two who runs your market and has an established history with the two or three landlords who are in that area. It's gonna be tough to break in. ", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "dpiitdl", "text": "If your seriously considering a career change, you need to anticipate making absolutely no money your first year.  Thats a fact, its not an exaggeration because you will likely work 60+ hours a week for a year and make little to no money.  It doesn\u2019t mean your a terrible broker, its because it takes a long time to build up your pipeline and also learn the business.  \n\nI switched careers into CRE and that first year was brutal but I love working in CRE.  Second year was much better, third was great and every year after has been even better.  My family and friends thought I was nuts for making the switch.  \n\nMost people I\u2019ve watched flame out either run out of money, have unrealistic expectations, don\u2019t truly enjoy real estate or just want a steady paycheck.  ", "replies": [{"id": "dpiqp1p", "text": "Good to know, thanks for the info. ", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "dphm0i7", "text": "It's a very unique skill set. You need to be detail oriented and able to deal with complex issues involving multiple disciplines including zoning, financing, legal, environmental, taxes, construction, leasing and more. But also be very self-motivated and persistent, able to talk to anyone and inspire trust of your clients. Doesn't really work without both sides.", "replies": [{"id": "dphwaj8", "text": "All of that may be true to be \"good\" at the job, but that is not the barrier. The barrier to entry is simply being able to close your first few deals. The vast majority of people who try this business out won't be able to. ", "replies": [{"id": "dphx7ud", "text": "I agree. Added to the above is you have to be able to financially and mentally survive those first couple years and get those first deals done.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "dphlmdq", "text": "Yes.", "replies": [], "depth": 1}, {"id": "dpxbp1o", "text": "Yes. ", "replies": [], "depth": 1}, {"id": "dq3yj8b", "text": "You need a strong mentor who has enough business to pass on business and leads to you. You only want to work with people who are already successful at CRE. I work as a business broker in Chicago and it took 2 years to make any money. ", "replies": [], "depth": 1}]