Residential, Commercial realty boundaries fading
Photo above: The Commercial and Industrial Committee of the Northeast Tennessee Association of Realtors. Photos by Scott Robertson
By Scott Robertson
In an increasingly competitive business landscape, nobody can leave money on the table. Realizing that, the Commercial Multiple Listing Service realtors in the Northeast Tennessee Association of Realtors are hoping to break down the walls that have long separated them from their residential counterparts. The hope, says Jerry Petzoldt, chair of the NETAR Commercial and International Committee and CEO of TCI Group, Jerry Petzoldt, Inc., in Kingsport, is to create a new relationship model that will benefit both commercial and residential realtors.
“Commercial real estate is a mystery to most people, including many residential realtors. We need more people, both in the general public and in residential real estate, aware of the commercial opportunities when they see them. Right now the question is, if someone has knowledge about an opportunity, do they know what to do with it other than talk about it with their friends? Most transactions that occur come from a seed of two people.
“In our CMLS committee meetings, we have been talking about ways to reach out to the 1,200 residential agents in NETAR,” Petzoldt says. “They represent a huge army. They have a lot of leads that they may not know exactly what to do with. They may not know the right questions to ask to find out that they have a real prospect. We know what to do and can work with them in a mutually beneficial manner.”
Petzoldt has a willing partner in NETAR President Eric Kistner, managing broker of Bridgepoint Real Estate and Auction. Kistner’s firm is relatively new to the market, and Kistner himself is open to new ways of doing things. “Of our 10 agents at Bridgepoint, nine are under 40 years old,” Kistner says. The average age of a residential realtor in the United States is 56. Many realtors have entered the field after successful first careers elsewhere.
“I don’t do a thing in commercial,” Kistner says, but, he adds, that doesn’t keep him from seeing NETAR has an opportunity to create more revenue for realtors on both sides of the residential/commercial divide.
“(Commercial realtors) have always been on their own little island over here, just kind of doing their own thing. That’s a shame. So we’re working together to see how we can meld those 1,200 realtors we have on the residential side and the commercial realtors on the other together.”
“(Residential realtors) have a vast network of people – from the friend they know at church who needs to sell a warehouse to the relative who’s a car dealer – and in the past the residential agents would either try to list a commercial property themselves without really understanding the commercial side – if you don’t know what evite is, you probably shouldn’t be working the commercial side – or just let the opportunity pass entirely. It’s so easy to call someone like a Shannon Castillo at Mitch Cox or a Jerry Petzoldt at TCI Group and refer the business to them. They’ll teach you the commercial business as you go along and you get a check at the end.”
To fund the initiative, NETAR has applied for a National Association of Realtors Commercial Innovation Grant.
“This is the third year the NAR has offered a grant to associations to be creative and innovate commercial ideas to increase the level of visibility of our commercial members to elevate the market,” Petzoldt says.
“About 15 minutes after I learned about this grant opportunity from our NETAR executive Edith Ann Wadewitz, I got a real long email from Eric,” Petzoldt says. “All it said was, ‘Let’s do it.’”
“I sent him a long email back,” Petzoldt says. “I said, ‘OK.’”
In addition to educating the residential realtors about the commercial side of the business, the grant funds would also be used to train realtors to communicate more effectively the role their profession plays in community development.
“This business is about being a servant leader,” Kistner says, “At some point in your career you have to realize that the search for wealth is great but you need to find some significance somewhere.” Most realtors know that and already add value to their communities, he says.
The grant application was overnighted to NAR Feb. 21, Petzoldt says, “We’re competing with all the associations around the country, and I don’t believe Tennessee has ever received one of these grants, but there’s only one accredited commercial organization in the state, and that’s in Memphis.”
Even if the grant funds don’t come through, Kistner says, the opportunity presented by lowering the wall between residential and commercial realtors is too great to pass up. ““One of the things we’re going to do, and we’ll begin rolling this out next month, is at our orientation for all the realtors – commercial and residential – we’re going to bring in a commercial person each meeting to talk about exactly what a transaction looks like on the commercial side. Residential realtors will quickly realize it’s completely different than selling a house – some commercial realtors’ transactions last 12 to 24 months, the marketing costs are a lot higher on the commercial side where signs for a commercial building can be $1,000 alone. But we’re going to teach our residential people to work with our commercial people as referral agents.”