When a business sets a goal, it may not have all the resources and knowledge to perform the tasks in order to reach it. The business would often reach out to one or more consultants who have the expertise and that plays a part in the goal. This is especially true for real estate.
The answer to the question “What do real estate consultants do?” is, at the same time, easy and difficult to answer. The top real estate consulting firms tell us much about the benefits of real estate consulting services, but rarely stop to explain what it is they actually do. It is time to shed some light on the matter.
The role of real estate consultants
There are many kinds of professions and trades that involve buildings, land, and the businesses surrounding them. To answer the question “What do real estate consultants do,” the first question to ask is “What kind of real estate consultant?”
Speaking in general terms, there are two kinds of roles that most consultants take part in:
- Real Estate Advisor: They utilize their expertise and experience to advise businesses on immediate or future decisions regarding a piece of property or asset portfolio.
- Real Estate Services Provider: They offer support or are put in charge of tasks that fall under real estate development on a property.
Depending on the client’s needs, it is not uncommon for a consultant to play both advisor and development support roles. There are many kinds of services a real estate consulting firm can provide, many of them fall into the following areas of business:
- Real estate economics and market research
- Asset management services
- Real estate finance and investment analysis
- Real estate development
There is a difference between real estate and construction consulting. A real estate consultant is more focused on the business and financial aspects of properties — this means they usually work on finished buildings or on development projects prior to construction (whether it’s ground-up or rehab). There are plenty of scenarios where both professions overlap, hence many of the top consultants have experience in both aspects.
What should real estate consultants provide?
Firstly, a real estate consultant has to be able to provide quality, expert advice and/or assist the client in reaching their goals. Through their expertise gained through years of experience in the field, they are expected to know the field better than anyone.
That expectation includes that they are in some way leading or at least following the industry’s best practices. Depending on the consultant’s specialization, it can require being constantly involved in the market and able to extract valuable information from his day-to-day experiences.
Secondly, for managing a healthy client-consultant relationship, a real estate consultant needs to listen to the client. Now, this seems a bit too obvious, as every good real estate professional can claim they listen to client’s needs.
However, successful real estate consultants listen on a deeper level. Not only do they carefully take into consideration the needs and wants that are presented to them by their clients, but they also read in between the lines to understand their broader goals, motivations, and their modus operandi.
Lastly, real estate consultants serve as a leader in the real estate business. Whether it’s providing expert advice on a specific real estate market segment or finding a solution in negotiating a contract, the consultant provides guidance to the client to help them reach their goals.
The best real estate consultants not only provide expertise in their field but also take a holistic view of how their services fit with other aspects of the business. This ability to connect the dots provides invaluable insight to the client.
An example of an assignment
Let’s take an example where a client wants to build a mixed-use apartment on some land they own but they are unfamiliar with some parts of the development process. They approach a real estate consultant and inquire about the various aspect of putting their project idea into action.
After speaking with the client, the consultant would first prepare all the research tools needed and prepare a schedule for performing the research, and upon approval begin the assignment.
By reviewing the client’s vision of the apartment project, a seasoned real estate consultant can spot the hurdles that need to be overcome in order to make it a reality. For example, if the project is sufficiently large, the client may also need a fiscal impact study submitted to the city or local jurisdiction so it can be approved by a council. Depending on the client’s experience in real estate development, the consultant can provide guidance on the steps to take while the research assignment is being worked on.
In many cases, the data collecting process would include meetings with local real estate professionals and community officials, and site-based visits, as well performing secondary research, consisting of compiling data on current trends in property development of the region.
The final report at the end would provide the client with actionable information on the feasibility of the apartment project and the development strategy to help them achieve success.
The above is just one example of the roles and tasks a real estate consultant does. In order to responsibly and adequately fulfill each client’s needs and wants, they can vary significantly, and depend especially on the range of services the consultant or consulting firm can provide.
How real estate consultants operate
There are some aspects of the normal business consulting profession that are identical, or at least quite similar, among all the real estate consultants.
For one, many consultants focus on larger building projects and real estate investment opportunities. The reason is the larger projects are far more likely to bring a healthy return on investment for their services.
Consultants offer services that are usually on an hourly or flat-fee basis. This means that you pay the consultant for all the work they do. You don’t offer commission remuneration as you would to real estate agents.
For some services that have been commoditized, larger real estate consulting firms may offer packages or bundles which are pre-priced. This way, a client can select the exact type of service he or she needs, while trying to remain within the price range he or she can afford.
Most real estate consultants also offer ancillary services that include market valuation for insurance purposes, assistance with various property tax disputes, and more.
The services a real estate consultant can provide are extremely diversified, and every client is certain to find the right way to satisfy his needs.
How Can VERTEX Help?
If you’re still not certain about who exactly real estate consultants are, and which one you think you may need, we are here to answer all your questions and provide consulting services if you need them. VERTEX has an expert team of construction consultants as well as real estate business professionals.
This article was originally published by Xpera Group which is now part of The Vertex Companies, Inc.