Understanding the Differences Between Commercial Real Estate vs Residential Agent

Posted by Excelsior Realty Team on April 12, 2024

The real estate business is split into two separate areas: residential and commercial. Both have some things in common. However, the type of real estate agent you work with is very important for getting the best deal. Understanding commercial real estate vs residential agent can go a long way here.

Commercial real estate agents are regular real estate agents who have extra skills. While commercial real estate agents are trained to work in residential real estate, the reverse is not always true. Conversely, a residential agent can adapt quickly and start working immediately in the market. But this isn’t the case for the commercial ones.

In this article, we will clearly discuss every nook and cranny of the differences between residential and commercial real estate agents. We will also briefly discuss the other types of real estate agents out there. Keep reading to explore more.

Residential vs Commercial Real Estate Agent at a Glance

Aspect Residential Real Estate Agents Commercial Real Estate Agents
Understanding of the Market Able to adapt quickly to market changes. Need to monitor current market and future projections.
Client Needs & Considerations Focus on individual client needs. Focus on business investment strategies and data analysis.
Transaction Times Typically shorter transaction times. Transactions may take months or even a year.
Education College degree not always required. Often requires a degree in business or finance.
Specialization Often specialize in specific property types or markets. Specialize in various areas like industrial properties, land development, etc.
Training Can start immediately in the market. Often require apprenticeship and mentorship.
Salary Commission-based with potentially lower earnings. Commission-based with higher earnings.

What is a Real Estate Agent?

Real estate agents are licensed professionals who help buyers and sellers buy and sell homes. The agent working for the buyer is called the buyer’s agent, which is not a surprise. The agent working for the seller is usually called the listing agent. Residential real estate agents are the ones you will use to buy or sell a home. Commercial real estate agents are for other things.

A commission, typically paid by the seller, is how real estate agents on both sides of the transaction make money. The commission for each agent is a certain amount of the total sale price. Usually, all of the commissions added together add up to 5% or 6%.

However, real estate agents require licenses before thinking of making money. The state must issue licenses to these agents. To get a license, agents usually have to go through training and pass an exam. Continuing education is often needed to keep a license valid. 

You can check your state’s real estate commission’s website to see if an agent is currently licensed. The website of the Association of Real Estate License Law Officials also has a database that you can search.

Some agents may have extra licenses or certifications that can help you buy or sell certain homes. You might look for a Certified Condominium Specialist if you are buying a condo, for instance. A person who knows about the new buildings in your area and has dealt with condo transactions before could be helpful.

Different Types of Real Estate Agents

Commercial Real Estate vs Residential Agent - Key Differences (1)


There are a few different types of real estate agents. The classification is based on their education, their role in the sale, their licenses and certifications, and the types of properties they buy and sell. Let’s look into these types:

Commercial Agent

A commercial real estate agent typically buys, rents, or sells commercial property. Some common types of commercial property include:

  • Retail spaces
  • Warehouses
  • Office buildings
  • Buildings that have more than one use, like a store, apartments, or condos
  • Industrial facilities

A commercial agent should know the local business market well. They must be able to help sellers find business clients by doing things like market research and even managing properties.

Residential Agent

The primary focus of a residential real estate agent is the acquisition, sale, or rental of properties intended for residential use. The most typical forms of residential property are:

  • Apartment complexes
  • Duplexes
  • Condos
  • Manufactured homes
  • Houseboats
  • Townhomes
  • Single-family homes

Residential real estate agents should know what kinds of homes are available in their area. They can even help people choose the best home for their needs. 


A real estate broker is a real estate agent who has gone through extra training and licensing to get the title “Broker.” Most of the time, brokers have more freedom and career options. For example, they can start their own brokerage firm. They can also be promoted to higher positions with more responsibility within an existing firm.

Listing Agent

A listing agent is also called a “seller’s agent.” That’s because they work for the seller when they buy or sell a home. It is up to listing agents to find buyers and make sure their clients get the best price for their homes.

Buyer’s Agent

An agent who works for the buyer in the sale of a house is called a buyer’s agent. Helping the buyer through the process of buying a house and negotiating the price when making an offer are the buyer’s agent’s job.


An agent who is a member of the National Association of Realtors (NAR) is called a realtor. To become a realtor, you have to 

  • Agree to follow the NAR’s Code of Ethics 
  • Pay your dues 
  • Keep up with your continuing education

Commercial Real Estate vs Residential Agent: What are the Key Differences?

After understanding all the types of real estate agents, it’s now time to move on to our main discussion: commercial vs residential real estate agent. Let’s look at the differences between working as an agent in either field:

Understanding of the Market

It is important for both types of real estate agents to always know what is going on in the market. When the market changes quickly, though, residential real estate agents know how to work in such a market. 

Compared to residential real estate, commercial real estate is usually a more stable market from month to month. However, investments in commercial properties are usually bigger and last longer. Because of this, commercial real estate agents need to keep one eye on the current market and the other on projections for the coming years. 

Client Needs & Considerations

There are not many houses for sale right now because demand is so high and supply is not so high. Others might even say they are selling themselves too much. While this is not exactly true, it is true that the needs and concerns of a residential client are very different from those of a commercial client. 

When clients and investors make big business investments, they usually look for population data, information about the property and where it is located, and statistics about the area. For the deal to go through, these things must be taken into account or be in line with their current business strategy.

Transaction Times

When there are more needs, transactions take longer. In residential real estate, agents are expected to be able to handle several listings or clients at the same time because of their business nature. Most of the time, transaction times are shorter. This lets residential agents get through the process a lot faster. 

However, this is not always the case for commercial agents. Before the deal goes through, it could take months or even a year. Some may think this is a long process, but it does pay off in the end, both in commission and in the relationship you build with the client. Someday, it might even lead to better and bigger things.


It is possible to become a residential real estate agent without going to college. You just need to get a license. The process for getting a license is the same for commercial real estate agents. However, commercial agents usually need to have a college degree in business or finance. 

It’s also important to mention that each state has its own rules about whether or not a real estate agent needs extra training to work in the commercial property market. No matter what kind of work they do, getting a license as a real estate agent is the same in most states. In the residential property market, credentials are based more on what employers want and need than in the commercial property market.

On top of that, most real estate agents have areas of expertise. For example, commercial vs. residential is its own specialty. However, in commercial real estate, agents can focus on a lot of different areas, such as industrial properties, land sales and development, retail leases, and so on.


There are properties that commercial and residential real estate agents and brokers specialize in. In real estate, condos and high-end apartments are two examples of specializing. As for the commercial sector, it could be developing land for new buildings or buying old buildings to fix up.

Choosing to work with a commercial agent who specializes in the type of properties you are interested in can be very helpful. That’s because the industrial and commercial property markets are complicated and not always clear.

No matter what kind of property they are working with, commercial agents and brokers need to be at the top of their game. In the case of building a green, zero-energy, state-of-the-art warehouse, for example, you could ask the development company you are working with if they have agents who are experts in those kinds of projects. Expertise that goes beyond even the best training is valuable in its own right.


When they first start out, commercial real estate agents usually work closely with a mentor. They also get a lot of training at the brokerage firm where they work. Commercial brokerages also tend to have much stricter hiring standards.

Commercial real estate projects are much more expensive, risky, and difficult than residential ones. So, it stands to reason that a commercial real estate management company would prefer their agents to have more specific knowledge and skills than those required to succeed in the residential field. 

When it comes to licenses, though, most states do not allow residential and commercial real estate agents to get different ones. However, once someone is hired, commercial real estate development firms usually expect them to have more experience and keep learning about the field.

As a residential real estate agent, it is easy to get started in the market and/or with a company right away. To be a successful commercial real estate agent, you almost need to work as an unpaid apprentice at a brokerage firm first.


Residential real estate agents often work around the clock. Conversely, commercial real estate agents have more regular hours. However, commercial real estate agents make a lot more money. 

As a general rule, both residential and commercial agents get paid based on commission. However, commercial agents depend on a few slower-moving but higher-paying deals throughout the year.


When people buy or sell property, real estate agents help them. Unlike commercial agents, residential agents focus on homes. However, both parties receive a commission on sales. 

To work as an agent, one must get a license from the state. It typically necessitates coursework and tests. On certain deals, a certification might be useful. 

Most of the time, commercial agents need a degree in business or finance. They also need to go through more rigorous training. For experience, they often start out as apprentices. Commercial agents also make more money from fewer deals. However, residential agents work longer hours.

However, choosing the best real estate agent needs proper research. Thankfully, Excelsior Realty is available in Lake Minnetonka. Our exceptional results build lasting client relationships. We are experts at negotiating a sale, assessing market values, or marketing your home. Contact us today to learn more about our services.