There’s often confusion about the roles of real estate agents, brokers, realtors, and real estate consultants. The first three terms are frequently used interchangeably, and they indeed do similar jobs. Still, they’re not exactly the same and are, furthermore, quite different from real estate consultants. To make things more challenging, some experienced people in the industry can play both types of roles. Professional real estate consulting experts from VERTEX have shared their knowledge to explain the differences between these jobs.
Agents, Brokers and Realtors
A real estate agent’s job is to help people buy and sell real estate. They can be hired by either the buyer or the seller and get a commission after a closed deal. A broker’s job is quite similar to an agent’s, except brokers have additional training; they’re licensed to work independently and can hire other agents. Likewise, they’re paid on commission and get a percentage of the commission agents working for them earn.
What differentiates a Realtor from both previously mentioned jobs is that they must be a member of the national association of realtors (NAR). That means that any licensed broker, agent, or any other type of professional working in the real estate industry can be a Realtor. The most notable difference between these three roles and a real estate consultant is that their focus is on the real estate transaction – hunting for buyers, sellers, and properties in listings, navigating the regulations, and providing negotiation on real estate purchases. Many other kinds of advisory are the job of a real estate consultant.
What is a real estate consultant?
Unlike agents and brokers, real estate consultants offer a more comprehensive selection of services to a wide range of clients. Their main goal is to make sure that their clients have sufficient information and reliable advice to make the decision that will result in a desired return on investment. Real estate consultants can be hired by property developers, real estate investors, builders, investment banks, and other clients who require expert assessment and advice when looking to develop or buy a property.
Real estate consultants are usually hired by commercial investors instead of residential buyers and sellers. They’re also called real estate advisors due to their role, which includes extensive research and data gathering. They can provide their clients expert opinions and guidance during each project phase to facilitate decision-making and ensure successful investments. The consultant’s job can be to conduct a thorough inspection, point out any deficiencies when performing an assessment, and advise on how to proceed or whether to proceed at all.
To do that, real estate consultants perform thorough research to confirm the viability of the investment. For example, they can visit the property location, meet with local professionals, analyze market trends, conduct feasibility reports, or perform competitive analysis. After that, they apply their expertise to all the gathered data and assessments to form an opinion and devise a plan corresponding to the client’s objectives.
Diverse types of real estate consulting
Some real estate consultants might specialize in working with one specific kind of business, while others work with a wide variety of clients.
- Property development. Real estate consultants can advise on commercial projects, research potential development sites, make feasibility reports, and explore market trends. This usually requires a background in economics or ample experience as an investor / developer.
- Consulting firms. Real estate consultants for big firms offering a wide range of services work with business owners, investors, lenders, and corporate real estate groups. They conduct market studies, perform due diligence, and provide advisory services.
- Real estate investors usually hire consultants to help manage the process. In addition, they may need to conduct an economic analysis to ensure that the buyer will get the desired return on his investment.
How are real estate consultants paid?
Unlike real estate agents who are paid on commission, real estate consultants are paid a flat rate or hourly consulting fee, but there is also the option of paying for a deliverable, like a report, in this case. Real estate consultants can work for large consulting firms or as independent consultants, so their compensation will also depend on those circumstances.
Another thing to remember is that real estate brokers mainly deal with buying and selling, so they get paid a commission when they complete the transaction. On the other hand, real estate consultants get paid even when a transaction doesn’t occur; if, for example, their expert analysis leads to the conclusion that this is in the client’s best interest.