Washington DC is so rich with history it’s very easy to get distracted by all the sights. There is seemingly a monument on every corner commemorating a historic event, war or person. Thankfully this was not my first time to DC so I wasn’t too distracted, but it was my first time to DC representing the Realtor Board as part of the larger organization of MNCAR. As a larger group we feel that we need to have little more representation and voice in government affairs and team up with some of the other commercial real estate related bodies. There are more than 1,100 MNCAR members here in Minnesota and that’s a pretty significant body of people who represent most of the commercial real estate here. The National Association of Realtors (NAR) has an annual meeting in Washington DC. So as a board we decided that it would be good for me as the current President to check it out and to see if there was some mutual benefit we could gain by attending.
I attended lots of seminars, went to Capitol Hill, met with our politicians/representatives from Minnesota. I don’t want to make this political so I will keep some of my snide comments and opinions to myself. But after spending a couple days at the House and Senate I wonder how anything actually gets done in this country and who elected some of these “politicians.” When asked direct questions by NAR or myself, many if not all the questions were deferred to legal aids or answered with comments that acknowledged the questions, but would need to be “looked into further”.
There is so much I would love to talk about, but wanted to share my biggest take away from my time with NAR. In speaking with their members I realized that the residential and commercial worlds don’t have a great cooperating network. There are agents who dabble in commercial real estate (resi-mercial agents) who have no expertise in the area. I have seen this more times than I care to count over the years. I have never seen a commercial broker/agent try to do residential transactions, so I don’t know why the other way around would seem okay. I’m sure this will stir some debate and might ruffle some feathers, but this is not just my opinion. I’m going to back this up and refer to The NAR Code of Ethics & Standards of Practice. Under Duties to the Public Article 11: Conforming to Standards of Practice & Competence: “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….”
There is more to the definition, but the big take away of Article 11 is to ensure that REALTORS do not attempt to provide services for which they simply aren’t qualified. So what does this mean exactly? Well, if you don’t have any experience with commercial real estate, and someone asks you to list their building or they need help leasing space or buying a commercial building, then you’re obligated to disclose your lack of experience. Here is where the commercial agent/broker comes in and assists in that area or better yet, the residential agent just refers the transaction over to a qualified commercial agent. The residential agent can still be kept in the loop and get paid a nice referral fee at the end of the transaction and there would be a much greater chance of the transaction actually getting done. Each party can continue to focus on what they do best.
In many if not most of the breakout sessions and side meetings the general consensus amongst the residential agents was that they enjoy working with people and the emotions involved and taking the time to help them with one of the biggest purchases of their lives. Coming from the commercial world I am/was on the opposite spectrum. I enjoy the business aspects of getting the best deal done for my clients without the emotion involved. I also much prefer our hours (except when I’m writing an article with a deadline).
So how do we marry these two very different worlds and bring them together? Referrals!!! They are a win-win for both sides. Many of the directors/principals/presidents of the residential groups that I met with said they want and need to get together with the commercial side to have cohesive and constructive work environments. Don’t be afraid of the other side, figure out a way to work together and refer business back and forth and do what is best for the client.
On a less serious note I flew my oldest daughter out to DC. She is going to school and studying criminology. We met with some friends of mine at the Secret Service and the Pentagon. Needless to say we had some pretty fun and interesting side trips in The White House, The Pentagon, The House of Representatives, The Senate and the Capital. I tried to have a little semblance of work and fun and I’m still in awe of all the history that is in our Nation’s Capital.
Until next time, reach out to your residential agent friends and let them know I would be happy to help them with their commercial real estate needs.
Leif P. Aronsen
TaTonka Real Estate Advisors
Posted at: 1:40 pm on July 6th, 2016