For the layman, the complexities involved with real estate matters can be overwhelming and confusing. While all the regulations plays a big part, another factor is the fact many people in the real estate industry can wear different or multiple hats, with duties that may overlap.
For those looking for assistance in real estate ventures, it is prudent to enlist help from a real estate consultant who is well versed in the market and real estate development. There are many benefits of hiring a real estate consultant, and it’s important to know that the roles they play differ from a Realtor (or agent/broker). In the following article, we will shed light on these crucial differences.
What are a Realtor’s responsibilities?
Realtors are real estate agents or brokers that focus on property transactions and are members of National Association of Realtors (NAR). They subscribe to the NAR’s code of ethics “to protect & promote the interests of their client.”
In a property acquisition or sale, they usually fall into being a listing agent or a buyer’s agent depending on who they are serving. For sellers they can assist in the marketing of a property. For buyers it often involves finding properties the client is interested in.
They are also involved in the drafting and negotiation of the real estate transaction, and advise their client on the offers & counteroffers until the buyer and seller reach agreement.
What do real estate consultants do?
A real estate consultant is a professional who provides a variety of advisory services in the real estate industry. Because of that, the consultant could serve a range of clients, including property owners, managers, agents, lenders, insurance providers, attorneys, general contractors, and anyone interested in acquiring property.
In some scenarios, real estate consultants can act as financial or investment advisors to their clients, and they are engaged to address their specific needs. The client company usually retains a real estate consultant to achieve specific objectives or tackle an immediate assignment that otherwise would require dedicating some of their company’s workforce or hiring more employees.
The types of services which consultants can assist clients include:
- Market research / financial feasibility reports
- Property condition assessments
- Project management / development support
- Property management
- Resolving construction related issues and litigation support
There are many specialties in real estate consulting, so very few individuals can carry out more than a handful of these services effectively. For example, a property developer hiring a consultant will naturally have different objectives from an investment bank.
The former would benefit greatly from the advice of a consultant specializing in development feasibility, asset and property management, whereas the latter would need advice on real estate portfolio analysis, investment, real estate valuation, and so on.
The relation between Real estate and construction consultants
In the building industry, there is a blur between real estate and construction consultants. Construction work is usually the critical step to making the planned development into reality, and some real estate consultants are well-versed in the field.
The simplest way to differentiate is construction consultants usually hold a construction or engineering license and/or they participate in the day-to-day tasks in the construction phase. Real estate consultants typically work with clients earlier in the development process, or after construction is complete.
What is the difference between a real estate consultant and real estate agent?
In an industry where many professionals have “sat around the table” and/or wear multiple hats, it’s important to distinguish what your goals are and who’s best suited to help you achieve them. The quick rule-of-thumb is that an agent focuses in transactions, while a consultant specializes in one or more services.
For example, if you want to find a property to purchase, nearly all realtors can directly help or direct you to a colleague who is well-versed in the market segment you are interested in. But if you want to know whether purchasing industrial space will give you a great return on your investment, a real estate economist will probably give you better insight than local brokers.
One of the major differences between the real estate agent and real estate consultant is how they earn their fees. The way they earn the fees also means that they have different financial incentives:
- Agents primarily earn their fees through commissions in real estate transactions.
- When hiring a consultant, you are usually paying hourly or on a flat fee basis.
In short, they are not substitutes, and there are common scenarios where both an agent and consultant can be beneficial in a real estate transaction. For instance, a consultant that provides property condition assessments (PCAs) will most often get you more detailed, objective information than a walkthrough with the property’s listing agent. Usually the Realtor would advocate using a PCA inspector for commercial properties, since they are often much more qualified than home inspectors.
Having an experienced buyer’s agent on that same deal can help navigate and process any complex transactions more quickly and they’ll have strong negotiation skills to secure a better price for you.
Where to find expert real estate consultants in the United States & beyond?
VERTEX is a consulting company in construction, engineering and real estate industries comprised of a team of seasoned consultants. Our real estate consultant team has extensive background and experience in market feasibility studies, land use, entitlements, environmental planning, acquisition due diligence, real estate development and property renovations. We’ve also handled real estate portfolio analysis and asset valuations, project management, construction management, property and asset management, dispositions, and more.
Protect your financial interests by partnering with the leading consulting experts in the United States, Canada, Mexico, and the world. Get in touch with us today for reliable assistance with your real estate matters.