Not sure what you mean by asking for "thoughts." It's part of the Code of Ethics we've agreed to honor and it makes sense. What's to think about?

My opinion:  If it isn't your area of expertise, refer it to someone who has those credentials.

Refer it to someone who is competent

CRE requires lots of knowledge, education and resources. The players often have deep pockets and attorneys on hand--and an extreme disdain for being cost time/money needlessly. If you're lucky enough to get into a deal without knowing how to walk your talk, you better have really good advisors and mentors to keep you out of trouble. Having said that, you have to start somewhere and if you're nice and professional a broker might take you under their wing and help you out. If you're not . . . that's why a lot of the top commercial guys won't return your phone calls. 3:)

Don't Do It.

Amen.... I think there are too many agents trying to get in on making the big buck quickly....that never happens with commercial real estate....and these are the agents who cause havoc....they are dangerous and have no business attempting to slime their way into a phase of real estate they know nothing about....if an agent has a commercial lead, it should be referred to one who is well-versed with commercial real estate....

this is how I feel about tracts of land that an agent may stumble across.... they don't know squat but want the deal and the listings of homes... I'd rather drag them out back and shoot them....  

can you tell I'm passionate about this topic!!!!!!!!!!!!!!!!!!

JM Padron, CCIM I refer to Article 11 of the COE all the time. Agents who ignore this Article are doing an injustice to their client. Agents who want to get into the commercial side of real estate have to start somewhere and Article 11 points out the correct way for doing it.

i always refer commercial real estate to a professional who handles these types of transactions. I work with residential real estate and don't intend to practice outside my expertise!

I agree.

Stick with what you know. NAR is offering more and more commercial training opportunites these days, so agents that want to do commercial should investigate those classes if they don't want to go with CCIM.

I think attempting anything outside of what you were trained to do be it Short Sales or land deals, would be a violation of this.  Too many agents chase the pay check and don't pay attention to this Article.

Hi JM - I completely agree. As one who has owned a commercial brokerage, I see way too many unqualified residential agents trying to wing it without a clue as to the unique differences in play.

I had some commercial sales, but if it is a project I have no experience, I'd partner up with someone who knows what to do. I prefer partnership to referral since it is great opportunity to learn new skills. 

What constitues "proper training and education"?  How is it really any different than residential agents?  No one should be serving clients if they are not trained or have the education. 

Works for me - if you don't know what you're doing don't do it LOL

Kinda works in any industry doesn't it!

Too bad many don't understand this until they get in way too deep.

I posted about this a few weeks ago - if you don't know what you're doing, refer it and learn later - don't practise on your customers

I don't believe in practicing outside your scope of expertise period... CODE or not.  I even referred out residential prospects in outlying markets, which were totally different than mine.  This part of the CODE is not enforced, like much of the red of the CODE.  

The ones with CCIM and special associations form a cliques. Often they will not pay a coop fee. Broker has to threaten to sue or join their special association to get paid. They do not consider realtors or broker the same class.

Agree JM Padron, CCIM 

Fortunately I am married to commercial agent so I refer commercial to him and he refers residential to me.  $$$ goes into our vacation fund!!!

I happen to agree. We cannot do both res & comm at my company.

Susan Laxson CRS nailed this one!

Many say they specialize in this, this and that such as short sales, but have never sold one. 

JM Padron, CCIM

My thoughts?  If an agent is going to engage in Commercial sales, it is very wise to have training and education.

Great Question.

If they are legally licensed in the state they are doing business in, how are they going to learn if they do not start while inexperienced? We all were inexperienced at one time. Even those with fancy designations that supposedly identifies one as an "expert". Every single agent and Broker...past and present...needed to have their 'first' deal(s).  And each was inexperienced until they weren't.

My take on it is:  There are just as many incompetent, experienced agents out there who also carry a huge ego with them. And they are the ones who scare me.

If you do not know it, then refer it out.

Realtors who want to get into commercial real estate need to take commercial real estate classes and they need a broker who knows commercial real estate to assist them or shadow/partner up with someone in commercial real estate. Classes alone are not enough. Also commercial real estate has many specialties, office buildings, multifamily, warehouse, land etc. 

This is a NAR ethics code which applies to NAR members.  We have our own ethics code in Canada.

My first commercial transaction was a 20 year restaurant lease from a close friend.

I took a CCIM to lunch and told him I needed a "mentor" per Article 11.  I slid a $100 bill across the table, and of course picked up the tab for lunch.

When my client found the property, I took the lease to my CCIM acquaintance.  He gave me the name of a real estate attorney to review it.

My CCIM guy went to church with me, he knew the commission to me was low (a couple of months rent); he refused to take any payment from me.

That restaurant is one of the most successful in Tallahassee.

That's why I refer any commercial leads.  

I have often thought commercial and residential should be separate licensing - there is very little similar between them. I always refer out

I follow the code of ethics. An agent shouldn't be working out of their area of expertise without property training or guidance. Thank goodness my broker knows commercial real estate. 

JM Padron, CCIM It is important to fallow Realtor Code of Ethics.

I refer out most commercial things.  I have listed commercial land as long as I am familiar with the zoning.

I feel you may need to partner with someone, but you can't just run away.

Not applicable in California.  The state is trying to pass legislation letting darn near anyone sell commerical real estate without a license!

The COE seems fairly clear.

Great article that is routinely ignored by many.

In Texas a broker is required to provide written notice as to the agents scope of authorized activities, and the agent must be competent in those activities.  So no only would it be a violation of the COE, it would also be a violation of our commission rules.

I don't see why this needs to be spelled out - would you try to do heart surgery if you weren't a surgeon?

I am licensed to practice Real Estate in California all types too. It is up to me to determine if I can do the job. Therein lies the strength & the weakness of the article. Its subjective.

Many try and fail at commercial real estate! They need to learn the art of referral!

It makes sense.  Always did.  Always will.  

Susan owns this one.

One could argue that it will be IMPOSSIBLE to complete that first transaction, in ANY discipline of real estate. But the reality is, agents do stumble through

1. the first residential sale,
2. the first short sale,
3. the first REO,
4. the first new construction,
5. the first 1031,
6. the first investor,
7. the first flip
8. the first VA/FHA
9. the first dual agency
10. and yes, the first commercial.

That is why BROKERs and team leaders steal big bunches of money from subordinate agents. TO PROVIDE THE OVERSIGHT that assures the client is properly represented.

Realtor Code of Ethics.... and so early in the day.