Broker vs. Advisor: What’s the Real Difference?

confused-woman

Nobody wants to lease or buy space.  We realize that this may sound out of place on the blog of a company named Verity Commercial.  What they really want is to make decisions that give them the best opportunity to meet their corporate/organizational objectives.

 

For a growing, midsize business your real estate and facilities will impact your objectives in many ways.  Over the years, we’ve learned that if any of the following apply, then a broker is simply not enough for you.

  • Your facilities and space are going to be one of your top three expenses,
  • Attracting the right talent is important to your business,
  • You deal with any type of regulation or complex issues related to your space,
  • You’re planning on spending more than $50,000 on construction or improvements, or
  • You anticipate that your business will grow by more than 15%/year

 

If a broker can’t get the job done, who can?  A business advisor.  This business advisor must have deep expertise in real estate, facilities, construction and so on, but make no mistake that deep expertise is built on a foundation of business acumen. 

 

So what’s the real difference between a broker and an advisor?

A broker, by definition is focused on the transaction.  A good broker cares about their client making a good transaction, but the focus is the transaction not the downstream impacts of the transaction.  Because of this focus a broker is not really prepared to understand, anticipate and manage the unforeseen issues that always arise.  They can be quite good at scouting out locations, negotiating terms and showing properties.  All of this is necessary, but it’s not adequate when facilities and space impact your business objectives.

 

While we are in the commercial brokerage business, we have never thought of ourselves as brokers.  We think it’s the central principle that has caused so many of our clients to remark to us that we were nothing like they were used to.

 

An advisor by contrast is focused on the short- and long-term results of the decisions being made.  They know how to evaluate the options you are considering, but because of their ability to understand your business they are able to identify other alternatives that haven’t even been considered.  An advisor does not view their job as ending on the day you’ve moved in and your phones are working.  They view their success by the impact your decisions have on your business over the next 1, 3, 5 and 10 years.

 

Here’s the acid test to determine if you’re dealing with a broker or advisor:  Would you want to solicit their opinion/experience even if the issue had nothing to do with real estate?  If you answer “yes,” you’re in good hands.

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