In both Tennessee and Georgia, there is no license specific to residential or commercial real estate. Regardless of the kind of transaction we’re conducting, we must adhere to the rules.
As Realtors, we have a license to practice either residential or commercial real estate – but should we? It depends.
Article 11 of the Realtor Code of Ethics identifies nine real estate disciplines: Residential real estate brokerage, real property management, commercial and industrial real estate brokerage, land brokerage, real estate appraisal, real estate counseling, real estate syndication, real estate auction and international real estate.
The same article states: “Realtors shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client.”
Compare the variety of real estate disciplines to the medical field, which is made up of dentistry, psychology, surgery, anesthesiology and many more specialties. Sure, every doctor studies gross anatomy in pre-med, but even they don’t go to a dentist when their toe hurts or seek out a cardiologist when they have a skin rash. Would you?
I raise these questions in response to what we’ve seen over the past year with COVID, which has undoubtedly affected the commercial real estate market. Nationally, more commercial properties are available due to many businesses closing and others pivoting to a hybrid workplace.
The growing commercial inventory and record low residential inventory has led some of my fellow residential practitioners to turn an eye toward commercial real estate. Thus, it’s up to Realtors to realize when partnering with another Realtor might be best – for the client, the transaction and themselves.
While there are many similarities between residential and commercial real estate, the differences between the two disciplines are significant.
While residential transactions involve termite inspections, property condition disclosures, HOAs and property lines, commercial transactions might include zoning and infrastructure regulations, cash-flow considerations and lease analysis.
When crossing between commercial and residential real estate, it sometimes makes sense for a Realtor to partner with a fellow agent to ensure they consider every nuance of the transaction, as well as the clients’ best interests.
I’m not suggesting our members who have covered both residential and commercial transactions successfully for years should not do so. They’re considered competent because they’re well-versed and trained in each discipline.
However, regardless of the transaction type, it’s important to keep the client’s best interests in mind.
Realtors collaborate with experts, including fellow agents, to make sure we’re best serving our clients, whether they’re buying a house or investing in commercial property. That’s Who We R.
Greater Chattanooga Realtors is The Voice of Real Estate in Greater Chattanooga. A regional organization with more than 2,400 members, Greater Chattanooga Realtors is one of 300 local boards and associations of Realtors nationwide that comprise the National Association of Realtors. Greater Chattanooga Realtors service Hamilton and Sequatchie counties in southeast Tennessee and Catoosa, Dade and Walker counties in northwest Georgia. For more information, visit www.gcar.net or call 423 698-8001.