Every good entrepreneur wants to capitalize on their efforts, and commercial real estate agents are no different. The entrepreneurial mindset is one in which we are always looking to generate more revenue, so it’s only natural that we seek ways beyond our commissions to increase our income. Here are some strategies I have used to generate additional revenue throughout my commercial real estate career.
Residential Real Estate Agent Referral Program
I have always been a strong marketer for myself and my company. Sometimes, we receive leads from our systems that are seeking residential properties, so I wanted to capitalize on capturing those referrals. Early in my career, I was fortunate to get to know several residential real estate agents in and around my market. I approached a few of the top agents who worked across the city and specialized in their particular areas, and we created a referral agreement understanding. If I received a residential referral, I would immediately send it to the agent who covered the client’s desired market. In turn, if the residential agent received a commercial referral, they would send it my way. All fees were agreed upon in advance and documented in writing. This generates a significant amount of additional income for myself and my company.
Out-of-Area Commercial Real Estate Agents
As you grow your business, you will often encounter tenants or buyers looking for assets outside your market. Having CRE agents to whom you can send referrals is a great way to earn more referral income. Also, position yourself as the expert in the market, and ask for referrals from out-of-area agents that have clients looking in your market.
Broker Price Opinions (BPOs)
Once you are established in your market and confident in your ability to price assets accurately, you can charge for completing broker price opinions. Lenders may request a BPO as a quick preliminary assessment of a property’s value for refinancing, loan portfolio evaluation, or risk management, especially when a full appraisal is not immediately necessary. Attorneys may request a BPO for asset division in divorce or estate matters, as they often need a current estimate of a property's value to assist with dividing assets or settling estates. A BPO provides a quick, cost-effective way to establish property value for negotiations or court filings.
Property Disputes: Such as partition actions where co-owners want to divide or sell jointly owned real estate, a BPO can serve as evidence of market value in court or during settlement discussions. This can also lead to you getting the listing when they are ready to sell.
Short Sale or Foreclosure Proceedings: When representing clients facing foreclosure or negotiating a short sale, attorneys may use a BPO to demonstrate the property’s current market value to lenders or the court, supporting the case for debt relief or approval of a sale below the outstanding mortgage balance. As a go to professional in the area, you can be awarded the contracts to sell the property, once the court has approved it to go to sale.
Consulting Services
Experienced agents may offer consulting on investment strategies and portfolio optimization, charging hourly or project-based fees.
Recruitment and Revenue Sharing
Some brokerages offer agents residuals or revenue shares for recruiting new agents or building a team (downline). Agents can earn a portion of the commissions generated by those they recruit.
Referring a Commercial Real Estate Lender
This is a strategy that can be used often. Having a great lenders (I recommend at least three, that you can refer out) you can trust and refer deals to can save you many headaches during transactions, plus you can receive a fee for referring the business (unlike residential loans, many times you can receive a referral fee for referring a commercial loan). I always recommend maintaining a strong working relationship with reputable lenders and ensuring they refer potential clients to you as well.
You got into this business to make money—be sure to explore all avenues to generate revenue.
