Other misconceptions about the real estate business abound.  For example, some think that sales agents and brokers are the same thing.  Sales agents work for brokers and can do many of same things, but only under the supervision of a broker.  This article uses the term broker when referring to brokers and the associated sales agents in that company. 

Broker can only negotiate a price for the sale or purchase of a house, right?  Aren’t they all basically the same since they all have access to MLS?  Even though I’ve been in the real estate business for 21 years, I have never had access to the MLS.  In fact, I have only acted as a broker for one house that I wasn’t buying for myself. 

Real estate brokerage has evolved in the last 20 years to be a highly fragmented and specialized industry.  Many brokers have, in fact, become more like investment advisors providing financial analysis, demographic studies, site selection research, business plans, portfolio analysis and management, and even construction management in some cases.  This is more the case for commercial brokers, but residential brokers have also become more specialized.

For example, residential brokers may specialize based on geography, price of the house, type of house (single-family, high-rise condos, etc.), type of client (owner-occupant or investor), type of service (property management), or even by the exclusive representation of buyers or sellers.  Many will be a combination of these specialties – high-rise condos in the half million dollar plus range in the Uptown area of Dallas.

Commercial brokers will often specialize by geography first as well and then by product type - office, industrial, retail, hospitality, and multifamily.  Many will further specialize by representing either the owners of properties or the users of properties (companies, governmental agencies, educational institutions, churches, etc.).  Those representing owners may specialize in handling only properties for sale (investment sales brokers) or properties for lease (project leasing agents).  Those representing users are often referred to as providing corporate services because they represent the interests of companies in their need for office, industrial and retail space whether purchased or leased.  So you may find a broker who only handles leasing assignments on behalf of owners with industrial warehouses of 100,000 square feet or more in California’s Inland Empire.

The degree of specialization is often a function of the size of the market.  For example, a broker in Amarillo may have to represent both owners and users because there isn’t enough business to focus on only one or the other.  In Chicago, however, it is more likely that a broker would focus exclusively on owners or users.

Rarely do you see brokers cross the residential/commercial line.  One exception to that rule is my brokerage practice.  My commercial company, Reata Commercial Realty, provides corporate services to help companies find space to buy or lease and investment sales services for investors.  My residential company, Reata Residential Investors, finds large portfolios of residential rental properties (single-family, duplex, four-plex, and small apartments) and then sells them directly to individual investors or creates an investment partnership of several investors to buy the portfolio.